The fashion groups have been given the grades. Like the students, some already knew what to expect: Prada, which saw a 16% increase in sales, and Hermès, with 12.6%, both got straight A’s. LVMH is progressing adequately with 3%, while Kering, with an 11% drop in sales, needs to improve. In hard cash: LVMH had a turnover of 20,694 million euros, Kering 4,500 million euros, Hermès 3,800 million euros and Prada 1,190 million euros.
Comparisons are as hateful as they are inevitable. In light of these results, everyone is looking at François-Henri Pinault’s conglomerate, which this Tuesday also announced that it expects its profits to fall between 40 and 45% in the first half of this year.
What are you doing wrong? Not much. Kering’s brands, from Gucci to Balenciaga to Bottega Veneta, are more vulnerable to the trend cycle than LVMH brands, such as Dior or Louis Vuitton, which cling to the resource of their history. For example, their different approaches to the vein that seems to be entertainment: while LVMH has created 22 Montaigne Entertainment to produce series and films that continue to fuel the legend of its brands, Pinault has acquired the CAA representation agency through Artèmis, its family. office, to eat part of the pie that is Hollywood without involving their firms.
The fluctuating nature of trends (or that in fashion sometimes you are at the top and sometimes you have to be at the bottom) is easier to explain to a reader than to a shareholder, and those in the group ask for action to be taken, they expect changes. They are especially concerned about Gucci, the largest brand in the group, and question its creative director Sabato de Sarno, although the pieces from its first collection have practically just arrived in stores: today they represent 7% of the offer, which It won’t become 100% until mid-year.
Despite the complaints, the company maintains its confidence in de Sarno, ensuring that they plan to make “more investments to support the new chapter.” Who has also shown support for the designer this week is Pierpaolo Piccioli, the former Valentino designer, who has walked around Rome with his wife loaded with Gucci bags à la Pretty Woman. Nothing like a good friend.
Executives and analysts have been talking about the luxury crisis in China for weeks, but not everyone seems to be suffering it in the same way: both Prada and Hermès enjoyed a double-digit increase in sales in that market, where Kering experienced a decline profits of 19% and LVMH of 6%.
It is not only at Kering that the continuity of its designers is questioned. These days the entire industry seems to take for granted the departure of Hedi Slimane from Celine, a house that was downgraded upon his arrival in 2018 but has added two billion euros in annual turnover to become the third most important firm in LVMH. The renewal of his contract with the group is being so complicated that it seems doomed to not materialize, and X is being filled with “it is said and commented” regarding what happens behind the scenes.
Slimane is the latest old-school star designer: he receives a million-dollar salary to which are added perfume royalties and the fees he requires for his work as a campaign photographer, because as a good star he demands control over all the firm’s activities up to the point that by her will Celine does not have any type of relationship with Condé Nast (Vogue, GQ, etc.). In addition, he spends most of his time in Ramatuelle, near Saint-Tropez, where he would intend to transfer the firm’s entire design team.
The industry, of course, is already making pools: some place him back at Dior (if the reader is still wearing skinny pants, know that he owes it to Slimane’s time at Dior Homme) and others place him at Chanel. What would happen to Celine? According to the same speculations, Pieter Mulier, current creative director of Alaïa, would take over from Slimane.