Gucci's owner gives widely different insight into 'China slowdown'

A woman takes a selfie in front of a tree decorated with red lanterns ahead of Lunar New Year celebrations in Ditan Park in Beijing, China, on 1 February. Photo: Thomas Peterres/Reuters

The US-China trade war is among one of the biggest risks to the global economy and a China slowdown has got investors from different sectors on tenterhooks.

But Kering (KER.PA), the luxury brand that owns the likes of Gucci, Balenciaga, Alexander McQueen, revealed on its 2018 earnings call that its Chinese customer base helped boost the group’s results. In the October to December period, revenues jumped 24.5% to €3.8bn (£3.3bn, $3.72bn).

“Sales among our Chinese clientele remained very dynamic in the fourth quarter, even with a high comparison base,” said Kering’s financial director Jean-Marc Duplaix on the earnings call.

Kering’s insight into China’s hunger for luxury products, amid a fall in consumption for other goods like mobile phones, is part of a growing line of companies which are calming fears from investors.

Last month the world’s largest luxury group LVMH (MC.PA) said customers from China massively helped increase demand for its handbags and Hennessy Cognac. In 2018, net profit jumped 18% to €6.35bn from the previous year.