Kering highlights Bottega Veneta’s stellar first half

While Kering‘s overall results were shadowed by Gucci’s disappointing performance, Bottega Veneta shone brightly among its promising assets. This includes the Eyewear & Corporate division, now also encompassing beauty, which surged 23% by June 30, 2024, jewelers Boucheron and Pomellato with double-digit growth, and Balenciaga‘s continued recovery. Bottega Veneta itself delivered a “record-breaking first half,” affirming the strategy initiated years ago focused on high craftsmanship, creativity, and exclusivity. The brand is expected to maintain its momentum with a series of new projects.

This strategy, initiated by designer Daniel Lee in 2018 and strengthened under the stewardship of creative director Matthieu Blazy who took over in 2022, has positioned the brand well amidst a turbulent market. Although Bottega Veneta experienced a sales dip at the end of 2023 and the beginning of 2024, it rebounded in the second quarter with a 2% increase (4% on a comparable basis). Consequently, its six-month revenue remained stable at €836 million, marking a 3% rise on a comparable basis. The only downside was a 28% drop in current operating income over the period, “due to significant investments in communication and highly exclusive clienteling events.”

“Bottega Veneta is reaping the benefits of the desirability it has fostered in the high-end segment. Retail sales in our own network have been the main growth driver, up 8% on a comparable basis for the semester and 7% in the second quarter. This strong performance is attributed to the positive impact of the product mix and the success of higher-value offerings,” explained Kering’s CFO, Armelle Poulou, during a conference call with analysts.

The retail channel, which accounts for 84% of the brand’s total sales, was particularly boosted by double-digit increases in Western Europe and North America and strong momentum in the Middle East. “In Asia-Pacific, where it still has significant room to grow and enhance its visibility, Bottega Veneta has been resilient,” she noted. However, wholesale sales, affected by the ongoing rationalization of the network through a reduction in multi-brand dealers, saw a 19% decline (-13% in the second quarter).

The operating profit for the period stood at €121 million, bringing the current operating margin to 14.5%. “We have increased operating expenses to support the brand’s development, focusing on communication and enhancing the boutique network,” Poulou highlighted. “Bottega Veneta continues to invest in stores, communication, brand ambassadors, and clienteling initiatives to amplify desirability across all markets. Expenses have risen due to the modernization of stores and the network,” she added, also mentioning the reopening of the flagship store in Dubai’s Mall of the Emirates.

Originating from the Veneto region, the label is finalizing its new headquarters in central Milan, Palazzo San Fedele. It also opened its first residency in a 15th-century Venetian palace, Palazzo Van Axel, in June. Here, Matthieu Blazy has created spaces for a select group of VIP clients, offering them a program of exclusive experiences and cultural encounters with emerging gallerists and artists. The venue will also host small workshops led by craftsmen and is set to showcase Bottega Veneta’s inaugural haute joaillerie collection.

“The investment in the Palazzo in Venice aligns with all communication operations, fashion shows, and the enhancement of the direct distribution network, as well as the opening of boutiques with the new concept layout. All of this has impacted profitability in the short term, but it definitely supports the brand’s value in the medium to long term,” noted Francesca Bellettini, deputy general manager of Kering, during the conference.

Among other investments, the recent acquisition of a “strategic supplier for the brand” aims to bolster its production capabilities in the leather goods sector, which continues to enjoy “resounding success.” According to Armelle Poulou, “strengthening control of our supply chain, internalizing production capabilities, and craftsmanship are all part of our long-term strategy.” To reinforce this focus on product and craftsmanship, the house has recently created the position of director of craftsmanship and heritage, assigned to Barbara Zanin.

Lastly, the group unveiled a new project expected to precede the launch of Kering Beauté’s first internally developed fragrance for Bottega Veneta by the end of the year. It involves “an exclusive collection of candles,” marking the label’s inaugural foray into this sector as its “first home product.”