Kering has set a sales target of 5 billion euros for Yves Saint Laurent

Kering wants its second-largest brand, Yves Saint Laurent, to reach 5 billion euros ($5.36 billion) in sales and increase its profitability in the medium term by growing in underperformed consumer markets and focusing on retail versus wholesale, the said French luxury goods group at a capital markets event on Wednesday.

The goal is to almost double the brand’s sales in 2021, namely 2.52 billion euros from a total of 17.66 billion euros for the group. The main brand, Gucci, contributes more than half of Kering’s total sales and profit.

Kering also aims for YSL to achieve and maintain an operating margin of 33% over the medium term, it said. Last year, the group posted a 28.2% margin, a record level but still a long way short of Gucci’s 38.2% margin.

The next milestones in YSL’s progress will be surpassing €3 billion in sales and achieving 30% margin, Kering said.

To achieve those goals, the brand will consolidate its existing demographics, with a focus on younger millennial and Gen-Z consumers while appealing to others, Kering said. It will also expand its business with local consumers, who account for a far larger share of sales than tourists, the group said.

YSL will consolidate its leading product category, leather goods, while growing in footwear and ready-to-wear, attracting more male consumers, who accounted for only about a quarter of the brand’s customers in 2021, Kering said.

The brand will also seek to further streamline its wholesale sales in favor of retail to follow in Gucci’s footsteps. Last year, YSL began streamlining its wholesale business, which has grown just 6% from pre-pandemic levels, compared to a 35% increase in sales in directly operated stores. Omnichannel expansion, including online growth, will be part of that strategy, Kering said.

Annual investments for the brand are targeted at 4% to 5% of sales and will include expanding the store network to a total of about 300 to 350, including a significant expansion of the U.S. store network by next year, the company said.

Kering has previously underscored the potential of YSL, which was likely the world’s fastest-growing luxury brand over the past year, Chief Executive Francois-Henri Pinault said following 2021 results earlier this year. Analysts noted at the time that the brand has been Kering’s star throughout the year and has a lot of potential in China as well as in pricing power and the development of its high-end offering.

Write to Joshua Kirby at; @joshualeokirby Kering has set a sales target of 5 billion euros for Yves Saint Laurent

Brian Lowry

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