Luxury Headlines – 30/01/2024
Luxury Headlines – 30/01/2024
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Kering Buys Fifth Avenue Luxury Property
Kering, owners of Gucci, have agreed to pay $963 million for a roughly 115,000 square foot property on New York City’s Fifth Avenue, thus expanding its retail locations into one of America’s most iconic ones. The group also recently acquired property on the Avenue Montaigne and the prestigious Rue de Castiglione in Paris. These acquisitions come at a time when the broader luxury industry's growth has slowed noticeably following a boom in the aftermath of the COVID crisis.
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Kim Kardashian Becomes Balenciaga Ambassador
Following Balenciaga’s recent PR crisis, the company has appointed Kim Kardashian as the brand’s new ambassador. The star and the fashion brand owned by Kering have enjoyed a closely cooperative relationship for years. Balenciaga outfits have been an essential part of Kardashian’s wardrobe for a long time, with the ambassador featured in numerous campaigns. This move is part of Balenciaga’s campaign to re-engage with celebrities through activations, including a star-studded runway show.
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Swatch Group Earnings Announcement Misses 2023 Forecast
Swatch Group, makers of Omega, Tissot, and Longines, and the eponymous Swatch brand, reported an increase in revenue of 5.2%, amounting to 7.88 billion Swiss Francs or the equivalent of $9.10 billion. While this figure aligned with broader market expectations, it missed the earnings forecast, with operating profit coming in at 1.19 billion Swiss Francs instead of the forecasted 1.23 billion Swiss Francs. This was primarily a result of increased capital expenditure, retail expansion, and currency headwinds from a strong Swiss Franc, in addition to a moderation in demand for more aspirational luxury brands. The company continues to be optimistic for the near and medium term due to its price positioning and strong exposure, especially concerning the Omega brand and its association with the Paris Olympics.
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Procter & Gamble’s SK-II Sales Hurt by Japan Wastewater
SK-II, Procter & Gamble’s high-end skincare line, has been one of the products impacted by the Chinese boycott of Japanese products following the release of Fukushima wastewater into the Pacific Ocean in August of last year; sales of the product decreased by 34% in the last quarter in Greater China. While some of the sales drop is attributable to a slower recovery in China, the anti-Japanese sentiment is also partly responsible. However, the company also noted that this sentiment is slowly turning around and that an uptick in sales is to be expected.
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Ferragamo Turnaround May Take Longer According to CEO
Following a sales drop of 8.1% for 2023, Ferragamo leadership has announced that realizing the intended turnaround will likely take longer. Full Year 2023 revenues came in at €1.16 billion, slightly above the consensus estimates, underpinned by revenue decreases of 17% in North America (representing a ¼ of total sales volume) and roughly 8% in APAC (representing 1/3 of total sales volume). Marco Gobbetti, CEO of Ferragamo, had previously announced an ambitious goal of €2.3 billion for 2026.
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