Kering’s jewelry and watch offerings saw solid sales in the first quarter even as challenging conditions in consumer demand for luxury persisted in most segments.
Revenue from the groups “other houses” category, which includes jewelry and watches, fell 11% year on year to EUR 733 million ($831.2 million) for the three months ending March 31, the company said Wednesday. While jewelry sales remained strong, some of the division’s other brands, including fashion brand McQueen, saw weaker results.
“The group’s jewelry houses pursued their development,” Kering noted. “Boucheron achieved a robust performance over a high comparison base, Pomellato had an excellent quarter…and Qeelin achieved outstanding growth.”
The average ticket size for each jewelry purchase improved during the quarter, Kering chief financial officer Armelle Poulou said on an analyst call transcribed by Seeking Alpha. The increased amount consumers were willing to shell out on jewelry is a “good sign that the people that decide to buy seem to not have a problem of price resistance when the product is good,” Poulou observed. While Asia Pacific saw no change in its jewelry sales, “very strong growth” in North America outweighed this.
Total revenue for the group, which also owns jewelry brand DoDo as well as fashion lines Gucci and Yves Saint Laurent, fell 14% to EUR 3.88 billion ($4.4 billion) for the period. The decline was the result of a significant drop at Gucci, decreased foot traffic in all major markets, and the closing of 25 net stores during the quarter.
“As we had anticipated, Kering faced a difficult start to the year,” said Kering CEO François-Henri Pinault. “We are increasing our vigilance to weather the macroeconomic headwinds our industry faces.”
Image: A Boucheron store in London. (Shutterstock)
