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Gucci Group reports strong fourth quarter

Gucci Group, the luxury goods division of French retail giant PPR, reported strong sales growth in the fourth quarter of 2009, and said that it demonstrated an improving sales trend.

Gucci Group, which comprises the Gucci brand as well as labels such as Balenciaga, Stella McCartney, Yves Saint Laurent and Alexander McQueen, notched up a 3.1% increase in like-for-like sales in the fourth quarter to €929.2m (£809m).

In the full 2009 year, sales at Gucci Group were down 3.6% on a like-for-like basis to €3.39bn (£2.95bn).

In its full year accounts posted today, PPR said that trading during January and February at Gucci Group remained in line with the fourth quarter trend.

PPR, which today confirmed that it would continue the Alexander McQueen label following the death of the designer last week, said total group fourth quarter operating profits fell 4%, or 5.6% on a like-for-like basis, to €1.38bn (£1.2bn). The total group includes both the Gucci Group, sportswear brand Puma and its mail order business Redcats.

Full-year sales were €16.5bn (£14.3bn) a 4% drop on the previous year. In the fourth quarter, like-for-like sales fell 2.3%.

The group said it will focus on driving sales through online retailing and growth in emerging markets in 2010, after cutting costs in 2009.

33% of sales at Gucci Group in 2009 were driven by sales in emerging countries and the division reported a 21% rise in sales in Asia-Pacific outside of Japan, with sales up 46% in mainland China. Gucci Group’s retail networks in Europe and the United States were the best performers.

Recurring operating profit was down by 5.3% at Gucci Group.

The “other brands” division of Gucci Group, which includes Alexander McQueen along with Balenciaga, Stella McCartney, Boucheron and Sergio Rossi, saw fourth quarter sales rise 9.3% on a like-for-like basis to €130.4m (£113.5m).

However over the full 2009 year, like-for-like sales at the “other brands” group of labels dropped 6.9% to €484.3m (£421.6m).

Profits at Puma dropped by 8.6% over the year but the sports brand has seen an improvement in trading in the early part of 2010.

PPR chairman and chief executive François-Henri Pinault said: “The plans put in place by all our brands and retail networks to streamline our organizations and energize our sales and marketing yielded positive effects throughout 2009.”

He added: “With an economic environment still in recovery mode, we must remain vigilant; however, we have started this new year with determination and confidence. While maintaining stringent management efforts, we are launching an energetic sales offensive aimed at further strengthening our leadership on the highest-growth markets, such as e-commerce and emerging countries, and at raising our business and financial performances in 2010.”

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