Kering’s jewelry brands had an “exceptional” year

Paris—Kering ended its fiscal year strong, posting record revenue for 2021 and surpassing pre-pandemic levels in 2019, and its jewelry brands stood out as a bright spot on the balance sheet.

CEO Francois-Henri Pinault said in an earnings call on Thursday that the luxury giant may be considering acquisitions in the near future, particularly in jewelry.

“We will be very actively reviewing a potential acquisition, whether it makes sense in terms of portfolio strategy going forward and whether we have the means to do so,” he said.

The company behind Gucci, Saint Laurent and other high-end brands posted fourth-quarter revenue of 5.41 billion euros ($6.14 billion), an increase of 35% year over year and 24% compared to the fourth quarter of 2019.

For the full year, revenue increased 35% year-on-year to €17.64 billion ($20.05 billion) and 11% from 2019.

“All of our homes are stronger than ever, and we are confident that we will continue last year’s momentum in 2022 and beyond,” Pinault said in an earnings release.

The company’s watch and jewelry brands, including Pomellato and Boucheron, fall under its “other houses” division, alongside Alexander McQueen and Balenciaga.

Quarterly revenue for the “others” division was €945.4 million ($1.07 billion), a 36% year-over-year increase and an increase 35% compared to 2019.

For the full year, revenue in this category increased 43% year-on-year to €3.26 billion ($3.71 billion) and 29% from 2019.

It was an “outstanding year for jewelry,” Kering said. “Boucheron has enjoyed success in new markets, Pomellato has continued to grow at an exceptional pace and Qeelin has experienced very rapid expansion.”

Boucheron recently launched its latest high jewelry collection. Called “New Maharajahs”, it is inspired by the style of Bhupinder Singh, the Maharajah of Patiala, who visited the jeweler in Paris in 1928.

“Boucheron is capitalizing on its exceptional fine jewelry and fine jewelry offerings to confirm its promise and strong potential in Asia-Pacific,” Chief Financial Officer Jean-Marc Duplaix said Thursday during the company’s earnings call.

Qeelin is experiencing “explosive growth”, Kering said, with the brand’s sales up 2.5 times from 2019 levels. The brand is doing particularly well in the Asia-Pacific region.

Pomellato could be next for strong growth, Kering said.

“Pomellato, which still derives most of its revenue from Europe, is gradually expanding its footprint, leveraging its iconic lines and new launches,” Duplaix said.

Kering recently sold the watch brands Ulysse Nardin and Girard-Perregaux to their management teams.

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Quarterly revenue from Kering’s own-operated stores, including e-commerce, increased 39% year-on-year and 34% compared to 2019.

For the full year, revenue at these stores increased 40% year over year. It increased by 18% compared to 2019.

Online sales continued to grow, up 55% year-over-year, and now account for 15% of total retail network sales, up from 13% of sales last year.

Wholesale revenue was up 17% year-over-year, but down 3% from 2019, consistent with the company’s “increasingly proprietary” approach to distribution.

By region, sales in North America increased 63% year-on-year in the quarter and 76% for the full year. Compared to 2019, sales increased by 82%.

As the U.S. luxury market continues to grow, Pinault said the company could expand its network into “second and third tier” cities like Atlanta and Nashville. A Gucci boutique should open soon in Austin.

Kering has sought to bolster its sustainability efforts by partnering with Richemont-owned Cartier to launch the Watch and Jewelry Initiative 2030 in partnership with the Responsible Jewelry Council, an effort to set sustainability goals at industry-wide.

The company also recently announced that it will no longer be using fur starting fall 2022.

Kering did not provide specific guidelines for the next exercise.