Gucci joins peers in defying China fears

Luxury goods group Kering joined competitors in defying concerns of waning demand in China, as momentum at its powerhouse Gucci slowed slightly from the fourth quarter although still outperformed most different fashion brands.

Like its peers, Paris-based Kering, which also owns Saint Laurent in addition to also Balenciaga, has been under scrutiny over whether demand among Chinese shoppers, who account for over a third of industry sales, can hold up.

The firm’s comparable sales rose a higher-than-expected 24.2 percent from the October to December period, when stripping out currency swings in addition to also acquisitions, in addition to also were up 24.5 percent on a reported basis to 3.8 billion euros ($4.29 billion).

“Sales among our Chinese clientele remained very dynamic from the fourth quarter, even which has a high comparative base,” Financial Director Jean-Marc Duplaix told journalists on Tuesday, adding of which spending by these customers had shifted by overseas to mainland China.

The group’s Italian label Gucci held on to its crown among the luxury world’s fastest-growing brands. Comparable sales growth of 28.1 percent from the fourth quarter marked a slowdown by the previous three months although far exceeded of which of rivals, while margins reached a record 39.5 percent in 2018.

Gucci’s might – with annual sales of 8.3 billion euros putting the item neck in addition to also neck with privately-owned Chanel behind LVMH’s Louis Vuitton as the top luxury label by sales – has raised questions about Kering’s reliance on the label.

the item accounted for over 80 percent of the group’s operating income in 2018.

Gucci has also been from the spotlight over a tax investigation in Italy, where Kering faces a potential 1.4 billion euro bill for allegedly avoiding tax on earnings generated by the Italian label in addition to also billed to a Swiss subsidiary.