PARIS — Call it the good cop, bad cop approach.
Where LVMH Moët Hennessy Louis Vuitton chief executive officer Bernard Arnault earlier this month used his company’s annual general meeting to warn of an impending crisis, Kering chairman and ceo François-Henri Pinault painted a rosy outlook.
At the Kering AGM on Thursday, held for the first time at the group’s new headquarters in Paris, Pinault predicted that Gucci would continue on its stellar growth path, after posting organic sales growth of 48.3 percent in the first quarter, raising questions about the sustainability of its performance.
“Gucci still has considerable margin for growth. Indeed, the positive momentum continues and is even gathering speed,” the executive told shareholders. Gucci ceo Marco Bizzarri and creative director Alessandro Michele have engineered a revival of the brand over the last two years thanks to a geek-chic aesthetic that is resonating with a wide swathe of consumers.
“Store productivity — while it rose strongly last year — will continue to increase. Indeed, thanks to a shrewder analysis by region, by country, by store, by category and even by subcategory, we have identified numerous opportunities for improvement,” Pinault said.
“[This year] promises to be rich in developments for Gucci, and we are convinced that its regained agility and the numerous initiatives under way will prolong and intensify even the extremely favorable dynamic of the last two years,” he added.
Though Gucci accounts for more than a third of revenues at Kering, Pinault was also upbeat about Saint Laurent, which posted organic growth of 33.4 percent in the first quarter. Saint Laurent ceo Francesca Bellettini touted the success of Anthony Vaccarello, who joined the brand as creative director last year.
“The launch of summer 2017, Anthony Vaccarello’s first collection for Saint Laurent, marked a significant success leading our sales in all channels, and several products rapidly rose to best-seller status, notably in the women’s shoes and ready-to-wear categories,” she said in a statement issued ahead of the annual meeting.
Pinault said Kering’s first-quarter performance showed it was on track for another year of strong organic growth. “In 2017, we will consolidate the growth of our operating margin, thanks essentially to Gucci, Saint Laurent and Puma,” he said. “I am therefore confident in our ability to strongly outperform the market.”
The upbeat speech seemed to have the desired effect, with shareholders approving Pinault’s total 2016 salary of 2.6 million euros, or $2.9 million at average exchange, by a majority of 88.8 percent. This amounted to a 9.8 percent pay rise for the executive.
The vote on compensation has become more fraught since France last year passed a law making mandatory and binding the annual shareholder vote on the pay and benefits of directors of listed companies, commonly known as a “say on pay” vote.