Kering to restructure luxury division

Published:  25 April, 2014

Kering, the owner of several luxury brands including Gucci, said it will reorganise its luxury division after its Managing Director stepped down, while reporting a 1.2% gain in first-quarter sales as revenue at its Gucci business slowed.

Revenue rose to €2.4 billion ($3.32 billion), Paris-based Kering said lon April 24. Analysts predicted €2.37 billion. Luxury sales advanced 6.3%, excluding acquisitions and currency fluctuations, topping the 6.2% estimate.

Alexis Babeau, Managing Director of Kering’s luxury unit since 2011, will leave “to take his career in a new direction,” while the company seeks to increase focus on individual brands, which are growing faster than Gucci. Starting next month, his role will be split into two, with Marco Bizzarri overseeing couture and leather-goods brands, excluding Gucci, and former LVMH Moet Hennessy Louis Vuitton Executive Albert Bensoussan heading watches and jewelry. Direct sales of Bottega Veneta handbags, Saint Laurent dresses and other luxury goods surged 13% in the quarter, led by demand in mature markets. Gucci, Kering’s biggest brand, also reported improved sales in its own stores, though on a comparable basis the revenue increase of 0.3% trailed analysts’ estimates of 0.5% as its policy of adding more expensive products and tightening distribution weighed on growth.