Kering executives probably want to pretend the last few months of 2022 never happened. Balenciaga became mired in scandal over the brand’s ties to Ye and a widely condemned campaign that posed BDSM-inspired objects with children. Alessandro Michele left Gucci, where growth continues to lag other big luxury labels. Sales for many luxury brands were dismal in China amid a surge in Covid cases. Kering doesn’t break out Balenciaga’s sales publicly – or its brands’ revenues in China, for that matter – but the impact will be hard to hide in fourth-quarter and annual results due out on Feb. 15.
After laying low for much of December and January, Kering has taken some steps to put its fashion houses in order. It appointed Sabato De Sarno, a Valentino designer, to succeed Michele. Balenciaga said it would show at Paris Fashion Week, and Demna addressed the controversial campaigns in a Vogue interview. Kering also announced it was forming a new beauty division, headed by veteran Estée Lauder executive Raffaella Cornaggia, creating new potential avenues of growth for some of its brands.
Kering is less able to control turbulence in its most important market, China. In the third quarter, Gucci’s sales in the country were still down year-on-year, even as some other luxury brands had begun to recover. The fourth quarter was an even tougher environment; last month, LVMH said it saw an unexpectedly steep decline in Chinese sales in December as coronavirus cases boomed in the country. Since abruptly lifting its Zero Covid policy, there are signs China will quickly rebound – get used to hearing a lot about “revenge travel.”
For Kering, the solutions to last year’s problems could be starting to fall into place. Still, it’s hard to say how Balenciaga’s return to the spotlight or Gucci’s creative revamp will actually land with consumers. The devil is in the details, and this week’s financial results are a key opportunity for the company to reassure investors it’s ready to move on.
What Else to Watch for This Week
Sunday
Super Bowl LVII; Rihanna performs at halftime
NYFW continues: Ulla Johnson, Puppets and Puppets, Jason Wu, Khaite, Kim Shui
Pure London trade show begins
Monday
NYFW: Carolina Herrera, Coach, Batsheva, Tory Burch, Elena Velez
Tuesday
Valentine’s Day
NYFW: Brandon Maxwell, Gabriela Hearst, Thom Browne, Altuzarra
US January inflation data released
Wednesday
Kering reports fourth-quarter and annual results
Shopify reports results
UK January inflation data released
US January retail sales
NYFW: Michael Kors, Willy Chavarria
Thursday
Frieze Los Angeles begins
Friday
Carnival begins (Brazil)
Hermès, Lanvin report results
UK January retail sales data released
London Fashion Week begins: Matty Bovan, Connor Ives
Saturday
London Fashion Week: Ahluwalia, Chet Lo, Molly Goddard, Roksanda, Simone Rocha, Richard Quinn
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