China Buoys Kering Jewelry Sales in 2020

RAPAPORT... Kering reported solid sales in its jewelry and watch divisions in 2020, as resurgent demand in mainland China helped offset weakness in Europe."The jewelry houses, penalized by their exposure to Western Europe, reported strong sales growth in Asia," the owner of high-fashion houses Gucci and Yves Saint Laurent said Wednesday. "Sales at Qeelin were up sharply over the year, buoyed by the strong recovery in mainland China. Boucheron also delivered a solid performance in the Asia-Pacific region."Sales at Kering's "other houses" segment - which includes jewelry and watches, as well as other fashion products - fell 10% on a reported basis to EUR 2.28 billion ($2.75 billion) during the year. Revenue at stores that were open a year earlier slipped 9%.Group sales dropped 18% on a reported basis to EUR 13.1 billion ($15.76 billion) and 16% on a comparable basis. Profit for the period slid 7% to EUR 2.15 billion ($2.59 billion), hit by global store closures and the halt in tourism due to the Covid-19 pandemic. Online sales jumped 68% as consumers turned to e-commerce while shops remained closed. Digital revenue accounted for 13% of Kering's total sales during the year.Although Kering still faces global challenges from the continued impact of the pandemic, its sales improved in the second half. "The health and subsequent economic crises caused by the Covid-19 pandemic in 2020 have had major consequences on consumption trends, tourism glows and global economic growth," the company noted. "Along with the luxury sector, the group was deeply impacted by the effects of the pandemic on its customers and its business operations, primarily in the first six months of the year. More favorable trends emerged in the second half, although these remain closely linked to developments in the health situation and associated restrictions across countries and regions."The luxury retailer believes it will see a further rise in 2021, it said.Image: A Qeelin jewelry store in Hong Kong. (Shutterstock)