Core Insights - Kering, the parent company of luxury brands like Gucci and Saint Laurent, confirmed a cyberattack in April that compromised consumer data of potentially millions of customers [1][4] - The hacker group Shiny Hunters claimed responsibility for the breach, stating they have access to 7.4 million unique email addresses [3] - Kering has assured customers that no financial data was stolen, but critical personal information such as names, email addresses, and phone numbers were compromised [2][3] Cybersecurity Threats - The luxury sector is increasingly targeted by cybercriminals, with recent attacks on other major brands like LVMH and Chanel highlighting the vulnerability of high-end retailers [5][6] - The nature of luxury clientele, with spending ranging from $10,000 to $86,000, makes their data particularly valuable for scams and extortion [6] - Cybersecurity is a significant concern for luxury brands, impacting business continuity and brand reputation [9] Financial Impact - Kering reported a 16% decline in sales to $9 billion (€7.6 billion) in the first half of 2025, following a 12% drop to $20.4 billion (€17.2 billion) the previous year [10] - The luxury industry is anticipating a sales decline of 2% to 5% this year, compounding the challenges faced by Kering [10] Technology Investment - Luxury brands are investing more in customer-facing technology (40%) compared to cybersecurity (21%), which may leave them vulnerable [7] - A significant portion of technology investments is directed towards external vendors (68%), potentially creating security risks [7]

Kering SA, whose luxury brands include Gucci, Saint Laurent and Balenciaga, said Monday it was the victim of a data breach that was discovered in June, the latest in a string of attacks on the consumer goods sector.Hackers accessed “limited customer data from some of our Houses,” the company said in an emailed statement. Those houses, or brands, immediately disclosed the breach to relevant authorities and notified customers, the company said. No financial information, including bank account numbers, credit ...

French luxury group Kering and Qatari investment company Mayhoola have agreed to amend their shareholders' agreement, initially agreed during Kering's acquisition of a 30% stake in Italian fashion brand Valentino in 2023. The amendment addresses the framework in the evolution of shareholding in Valentino. Under the revised agreement, the existing ownership structure of Valentino will remain unchanged until at least 2028. Mayhoola's put options on Kering for its remaining 70% stake acquisition in Valenti ...

Investment Rating - The report provides a mixed investment rating for the luxury goods sector, with specific companies like LVMH and Hermès showing resilience, while others like Kering and Canada Goose are facing significant challenges [22][30]. Core Insights - The luxury goods market is experiencing a slowdown, with overall retail sales in North America showing fluctuations, particularly in the luxury segment, which saw a decline of up to 14% in certain months [6][22]. - The report highlights a significant disparity in performance among luxury brands, with LVMH and Hermès maintaining positive growth, while Kering and Canada Goose reported substantial declines in revenue [22][30]. - The global economic outlook remains cautious, with the IMF projecting a world GDP growth of 3.2% for 2025, which may impact consumer spending in the luxury sector [4]. Summary by Sections Economic Outlook - The IMF forecasts a global GDP growth of 3.2% for 2025, with developed countries expected to grow at 1.8% and emerging markets at 4.2% [4]. - China is projected to grow at 4.5%, while India is expected to lead with a growth rate of 6.5% [4]. Retail Performance - North American retail sales showed a mixed performance, with overall sales declining by 0.4% in June 2024, while luxury retail sales experienced a more severe drop of 14% [6]. - The luxury segment's performance is expected to remain volatile, with some months showing recovery while others continue to decline [6]. Company Performance - LVMH reported a revenue decline of 7.1% in Q2 2025, while Hermès showed a more stable performance with a decline of only 0.5% [22][30]. - Kering faced a significant revenue drop of 17.9%, indicating challenges in its luxury brand portfolio [30]. - Canada Goose reported a staggering decline of 61.8% in its latest quarter, highlighting severe operational challenges [30]. Market Trends - The report notes a shift in consumer behavior, with a growing preference for brands that offer unique and aspirational products, impacting traditional luxury brands negatively [22]. - The luxury watch segment, particularly Swiss watch exports, saw a decline of 5.6% in June, indicating broader market challenges [10]. Regional Insights - The report emphasizes the importance of the Chinese market for luxury brands, with a notable increase in Chinese tourists traveling to Japan and the U.S., which could influence luxury spending patterns [17]. - The performance of luxury brands varies significantly by region, with some brands performing better in Asia compared to North America and Europe [22].

Core Insights - LVMH and Kering reported declines in their performance for the first half of the year, while Prada Group experienced growth, highlighting a divergence in the luxury market [2][6][7]. Financial Performance - Prada Group's net revenue for the first half of 2025 reached €2.74 billion, reflecting a 9% increase year-over-year at constant exchange rates [2][3]. - Retail sales net revenue grew by 10.1% year-over-year, while net profit slightly increased to €386 million, up 0.62% [2][4]. - The Prada brand saw a decline in retail sales net revenue by 1.9%, while Miu Miu's retail sales surged by 49.2%, contributing significantly to the group's overall performance [2][4][10]. Brand Performance - Miu Miu has entered a high-growth phase, with a retail sales net revenue increase of 92.7% in 2024, and it now accounts for nearly 32% of Prada Group's total retail sales net revenue [4][15]. - Despite Miu Miu's strong performance, the growth rate has slowed compared to previous years, indicating potential challenges ahead [16][18]. Regional Performance - Prada Group achieved growth across all regional markets, with the Middle East showing the fastest retail sales growth at 26% year-over-year [10][12]. - In the Asia Pacific region, retail sales net revenue increased by 10.4% to €838 million, while Europe, the Americas, and Japan also reported positive growth rates [12][10]. Market Dynamics - The luxury market is experiencing a slowdown, with major brands like LV and Gucci facing challenges, while Prada Group's strategic focus on brand positioning and younger consumer engagement has allowed it to thrive [14][15]. - The shift in consumer preferences towards brands like Miu Miu reflects a broader trend in the luxury sector, where younger generations are driving demand [16][18].

Core Viewpoint - In the first half of 2025, while major luxury brands like LVMH and Kering reported declines in performance, Prada Group experienced growth, driven primarily by its Miu Miu brand, which has seen significant sales increases [1][5][11]. Financial Performance - Prada Group reported a net income of €2.74 billion, a 9.1% increase year-on-year, with retail sales netting €2.45 billion, up 10.1% [1][5]. - The adjusted EBIT rose by 7.55% to €619 million, and net profit increased by 0.62% to €386 million [5][12]. - Prada brand's retail sales net income decreased by 1.9% to €1.65 billion, while Miu Miu's retail sales surged by 49.2% to €780 million [1][5][7]. Brand Performance - Miu Miu accounted for nearly 32% of Prada Group's total retail sales in the first half of 2025, marking a historical high for the brand [4][14]. - Miu Miu's retail sales growth has been robust, with a 92.7% increase in 2024, and it successfully entered the "€1 billion club" [4][14]. - Despite Miu Miu's strong performance, its growth rate has slowed compared to previous years, indicating potential challenges ahead [15][17]. Regional Performance - Prada Group achieved growth across all regional markets, with the Middle East showing the fastest retail sales growth at 26% [7][8]. - In the Asia-Pacific region, retail sales increased by 10.4% to €838 million, while Europe, the Americas, and Japan saw increases of 9%, 12%, and 4%, respectively [7][8]. Market Trends - The luxury goods market is experiencing a slowdown, with a report indicating the first decline in luxury consumption in 15 years, excluding the pandemic period [12]. - The shift in consumer preferences towards younger brands like Miu Miu suggests a changing landscape in luxury brand appeal [11][12].

Core Viewpoint - The luxury goods growth model is being questioned as Prada Group's recent performance raises concerns, following disappointing results from other luxury giants like LVMH and Kering [1][8]. Financial Performance - Prada Group reported an adjusted EBIT of approximately €618.5 million, a year-on-year increase of 7.55% [2]. - Net income was around €386 million, reflecting a 0.62% year-on-year rise [2]. - Earnings per share stood at €0.151 [2]. - Retail sales net revenue increased by 10.1% year-on-year, accounting for 89.5% of total net revenue [2]. Brand Performance - Prada brand's retail sales net revenue slightly decreased by 2% when calculated at constant exchange rates, while Miu Miu's retail sales net revenue surged by 49% [3]. - Miu Miu's sales growth in the second quarter slowed down significantly compared to previous quarters, which saw growth rates of 93%, 105%, and 84% [7]. Regional Performance - All major markets showed growth: Asia-Pacific retail sales net revenue increased by 10.4%, Europe by 8.6%, the Americas by 12.4%, Japan by 4.3%, and the Middle East by 25.7% [7]. Market Challenges - Morgan Stanley noted that Prada's second-quarter performance was below expectations due to a slowdown in luxury consumption among cross-border travelers, with a year-on-year sales growth rate of 6.1%, down from 12.5% in the first quarter [7]. - Prada's CEO highlighted that the current market challenges are more cyclical rather than structural [1]. Strategic Outlook - For the second half of the year, Prada issued a warning about uncertainties in the recovery of the tourism sector but emphasized three certainties: maintaining a full-price sales strategy, reviewing operational efficiency quarterly, and avoiding shortcut growth strategies [7]. - Prada aims to sustain growth through precise retail strategies and new store openings, while Miu Miu plans to expand its market share in leather goods and introduce new store experiences globally [7].

Core Viewpoint - The luxury goods growth model is being questioned as Prada Group's recent performance raises concerns following disappointing results from other industry giants like LVMH and Kering [2][6]. Financial Performance - Prada Group reported an adjusted EBIT of approximately €618.5 million, a year-on-year increase of 7.55% [3]. - Net income was around €386 million, up 0.62% year-on-year, with earnings per share at €0.151 [3]. - Retail sales net revenue increased by 10.1% year-on-year, accounting for 89.5% of total revenue [3]. - Retail sales net revenue for the Prada brand slightly decreased by 2% when calculated at constant exchange rates, while Miu Miu's retail sales net revenue surged by 49% [3]. Regional Performance - All major markets showed growth: Asia-Pacific retail sales net revenue grew by 10.4%, Europe by 8.6%, the Americas by 12.4%, Japan by 4.3%, and the Middle East saw a remarkable increase of 25.7% [5]. - Morgan Stanley noted that Prada's second-quarter performance fell short of expectations due to a slowdown in luxury consumption among cross-border travelers, with a year-on-year sales growth rate of 6.1%, down from 12.5% in the first quarter [5]. Market Challenges - The luxury sector is facing significant challenges amid economic uncertainty and cultural shifts, potentially leading to the largest setback in 15 years [6]. - Even leading brands like LV and Dior are showing signs of fatigue, with LVMH's core fashion and leather goods revenue declining by 9% and net profit dropping by 22% [6]. Consumer Trends - Younger consumers, particularly Generation Z, are increasingly questioning the value of luxury goods, moving away from the traditional perception of luxury as a status symbol [7]. - Brands with less prominent logos, such as Loro Piana and Brunello Cucinelli, are experiencing growth, indicating a shift towards understated luxury [8].

Following my coverage on Kering ( OTCPK:PPRUF ) in April, which I downgraded to a sell rating as I did not foresee any recovery in Gucci or China and its product refresh strategy was not working, this post is I take a fundamentals-based approach to value investing.I disagree with the common misconception held by many investors that low multiple stocks must be cheap. I look for companies that offer the best long-term durability at the most affordable prices. Consequently, I have a propensity to be drawn to c ...

Group 1 - The core viewpoint of the article highlights that Kering Group experienced a significant decline in sales during the second quarter, with Gucci's sales plummeting by 25% [2][3][4] - Kering Group's financial results for the first half of 2025 show a revenue of approximately €7.587 billion, a decrease of 16% compared to the same period in 2024 [4][5] - The recurring operating income for Kering Group fell by 39% to €1.582 billion, while net income dropped by 46% to €474 million [4][5] Group 2 - Gucci's revenue for the first half of 2025 was about €3.027 billion, reflecting a year-on-year decline of over 25%, with a notable 30% drop in the Asia-Pacific region [6][7] - Kering Group is currently attempting to sell properties in major cities like New York, Milan, and Paris to raise additional funds, with expectations of more store closures in 2026 and 2027 [8][9] - The stock price of Kering Group has decreased by over 21% in the past year, with a year-to-date decline of 4.4% [9]