And while Gucci is growing less quickly, it's on the right path.
Everyone was wearing Daniel Lee's new designs for Bottega Veneta to the shows this past fashion month, and while some of that product may have been gifted, it's now explicitly clear that a lot of people were buying it, too.
There was a lot riding on Lee's debut at Bottega Veneta. Even before the former Celine designer's first collection hit the runway, Kering executives would use his hiring to reassure investors in earnings reports that showed negative sales figures for the brand, drumming up excitement for his debut that would surely turn things around. Fortunately, Lee met everyone's expectations with Kering highlighting "excellent reception of the new Bottega Veneta collections" in its latest report.
While Bottega Veneta has yet to reach Gucci levels of growth, its results are more positive than they've been in a long time now that Lee's designs are on shelves and new CEO Bartolomeo Rongone is in place. In the third quarter of fiscal 2019, sales were up 9.8% as reported and 6.9% on a comparable basis to €284.3 million (about $315.8 million). Most of that growth came directly from Bottega stores, where comparable sales were up 7.5% — strongest in North America and Western Europe. But wholesale was up, too — 4.1% to be exact.
Lee's Spring 2020 collection already appears to be in high demand from buyers. Moving forward, the brand will invest in its teams, marketing and communications, and ensuring "sufficient inventory levels" to meet demand, according to Kering CFO Jean-Marc Duplaix.
Kering execs were probably excited to see some positive movement at Bottega given that sales at its cash cow, Gucci, have understandably begun to slow. Comparable sales at the Italian house were up 10.7 percent to €2.375 billion (about $2.64 billion), while this time last year they'd increased 35.1%. That's considered a very high basis for comparison that would be quite difficult to top. Given that, 10.7 percent is actually pretty strong. Saint Laurent is growing at a similar clip with comparable sales up 10.8%. Duplaix noted that Saint Laurent still has "large untapped potential" suggesting Kering has bigger plans for the Anthony Vaccarello-led label.
Overall, Kering is in a good place as it looks to the end of the year, and has lots of momentum to build on.
"We achieved another strong quarter, and all our segments contributed to our solid top-line gain," said François-Henri Pinault, chairman and chief executive officer, in a statement. "Our progress, on top of considerable expansion in the past two years, is healthy and well-balanced across all houses."