Fresh off its worst quarter on record, Kering believes that a focus on sustainability and diversity will serve it well amid the current retail sector upheaval. The pandemic has accelerated the brand’s efforts to reduce waste. It is working at all levels of the value chain, lowering the number of prototypes, reducing production waste and live streaming fashion shows, etc. Finally, Kering has intensified use of artificial intelligence to power everything from product recommendations to supply chain forecasting.
Kering is betting on millennial and Gen Z customers to help it bounce back from the Coronavirus crisis in the second half, led by a recovery in the key Asia-Pacific region. The brand’s net profit by fell 63.4 per cent in the first six months of the year after COVID-19 forced the French luxury group to close stores and factories worldwide, and brought tourism to a halt. The group’s revenues in the three months upto June 30 fell 43.5 per cent to €2.17 billion, representing a decline of 43.7 per cent in comparable terms. This came on the heels of a 15.4 per cent drop in the first quarter.
However, the group flagged an encouraging recovery from COVID-19 with sales in mainland China rising more than 40 percent in the second quarter, and positive trends emerging in Europe and the US from mid-June. But organic sales at its cash cow brand Gucci fell by 44.7 per cent in the second quarter, compared with a 23.2 per cent drop in the prior three months.
