Latest news with #Kering
Yahoo
3 hours ago
- Business
- Yahoo
Kering will be booted from Europe's premier blue-chip index as defense giant Rheinmetall boosted by the continent's war footing
It's been a boom time for defense companies for the last few years—and the opposite of that for luxury companies. The result? German arms maker Rheinmetall will soon become part of the Euro Stoxx 50 benchmark of the largest listed European firms, replacing Gucci owner Kering. The change will occur on June 20, Stoxx group, which operates the index, confirmed in an emailed notification cited by Bloomberg on Tuesday. Other members of the Euro Stoxx 50 include LVMH, Novo Nordisk, and Mercedes-Benz. JPMorgan analyst Pankaj Gupta referred to a possible reshuffle in the index's companies in a note from May 22, highlighting that Deutsche Bank and energy firm Siemens could also be likely additions over the year. The move isn't surprising, given that Rheinmetall's shares have surged 250% in the last year amid a huge rearmament across Europe and the world. The Düsseldorf-based company announced it had received a massive ammunition order earlier today, underscoring the growing demand for weapons. Rheinmetall, which also supplies automotive parts, saw operating profits increase 61% to €1.5 billion last year. The weapons company has benefited from U.S. President Donald Trump's swaying stance toward Ukraine and European allies, which has paved the way for a rearmament drive. Rheinmetall CEO, Armin Papperger, expects its order book to swell by 450% in the coming five years, he told German outlet Handelsblatt in April. Much of Rheinmetall's success has been a recent phenomenon—its shares have risen 1,800% since the Ukraine war began in February 2022. It was not until March 2023 that the arms manufacturer became part of DAX, the German benchmark index of forty blue-chip companies. Meanwhile, the luxury sector—and indeed, Kering—isn't having a heyday. The French conglomerate has faced a prolonged slump and internal crisis over some of its biggest brands. Kering's sales fell 12% to €17.2 billion in 2024, while Gucci, its most lucrative brand, was down 23%. U.S. tariffs further complicate Kering's flailing business as it doesn't plan to ramp up production in America. Kering's shares are down 47.4% over the last year. If it's any solace to Kering, it won't be the first company to be booted from a stock index over lackluster performance. Last September, Burberry, the British luxury company known for its iconic check patterns, was kicked out of London's FTSE 100 index after a 15-year streak. The trench coat maker had also struggled with poor performance as the appetite for luxury goods, particularly in China, began to wane amid economic pressures. Burberry has undergone a big leadership change and announced a cost-cutting strategy, inspiring hope for a possible return to the FTSE 100 index. But that has yet to happen. In recent months, some of the best-performing stocks on the Euro Stoxx 50 include other companies that dabble in defense, such as Safran and Airbus. Stoxx, Rheinmetall, and Kering didn't immediately return Fortune's request for comment. This story was originally featured on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
11 hours ago
- Business
- Bloomberg
Rheinmetall to Replace Kering in Euro Stoxx 50, JPMorgan Says
Rheinmetall AG 's surging stock price has earned the tank and munitions maker a place in the euro area's main stock benchmark. The German company will replace Gucci owner Kering SA in the Euro Stoxx 50 benchmark as of June 20, JPMorgan Chase & Co strategist Pankaj Gupta wrote in a note, citing index compiler Stoxx Ltd. It will be the only pure-play defense name in the gauge, which counts Safran SA and Airbus SE among its members. Bloomberg News has reached out to Stoxx by phone and email for comment.
Yahoo
a day ago
- Business
- Yahoo
Luxury Brands Sweat Consumer Discounting After Price Hikes
Everything is not so 'gucci' in the world of luxury goods. Brands that cater to the uber-wealthy, including LVMH's Christian Dior, Kering's Gucci, and Chanel, saw a dip in sales for the first quarter of 2025, continuing a slowdown that started last year. While CEOs of luxury goods retailers are chalking up the challenging environment to macroeconomic turbulence, market analysis suggests the industry's excesses of the past few years could be contributing to weakness. READ ALSO: No 'Gray' Area in New York Times' AI Deal with Amazon and Can US Tourism Bounce Back Amid Trade War? While luxury goods companies have largely been immune to the state of economies, the decline that started last year could accelerate into 2025, Morgan Stanley analysts Eduoard Aubin and Arunima Sinha said last week during a state-of-the-market discussion at the firm's luxury conference in Paris. Chinese nationals and Americans, the two cohorts expected to drive more than 50% of total spending in the next three to five years, are traveling less. Fewer Americans are heading to Europe, and fewer Chinese people are flying to Japan, which could translate to weaker sales in the second quarter than in the first, according to the analysts. Waning business optimism about China and weakness in US consumer spending also do not bode well for the industry. Chanel, which usually raises prices a couple of times a year, is in wait-and-see mode on potential hikes, global CFO Philippe Blondiaux said in a recent interview with Vogue Business. Some luxury retailers are chugging along, with Hermès and Cartier parent Richemont reporting sales growth in the first quarter of 2025 from the year prior. The price of the smallest Birkin bag rose to $12,700 in May, per Sotheby's. Luxury brand companies' best years coincided with the largest increases in US households' net worth. Profits nearly tripled between 2019 and 2024, with the four biggest luxury companies — LVMH, Hermès, Richemont, and Kering — taking the lion's share, per a McKinsey report published in January. Price hikes, some of which were as high as 100% on certain goods, accounted for approximately 80% of industry growth during that period, the report stated. Demand for leather handbags, branded jewelry, and watches reached a fever pitch as US households' net worth rose by $51 trillion between 2020 and 2024. Much of that went to the top 20%, or households earning more than $160,000, which were supported by a rise in financial wealth (Read: stock markets going up): 'If we don't have these very large increases in financial wealth, we may not have very large increases in planned consumption for this particular cohort,' Morgan Stanley's Sinha said. There's also an ongoing debate about whether the price hikes during that period of outsize industry growth shut out aspirational buyers. 'For the sector to grow in the medium- to long-term, it cannot just rely on millionaires and billionaires. It has to increase, to recruit from the middle class,' Aubin said. Yes for Less: Recruiting might be difficult. Value-conscious shoppers' behavior lately shows regular folks are prioritizing function over fashion. James Conroy, chief of Ross Stores, said in an earnings call in May: 'In terms of customer behavior, perhaps you could say there's a little bit of a shift towards more functional items versus discretionary items.' This post first appeared on The Daily Upside. To receive delivering razor sharp analysis and perspective on all things finance, economics, and markets, subscribe to our free The Daily Upside newsletter. Sign in to access your portfolio
Fashion United
4 days ago
- Entertainment
- Fashion United
Creative direction reshuffle: Does the trust between CEO and creative director have an expiration date?
With Maria Grazia Chiuri's departure from Dior now official, new appointments are anticipated. It seems as though all that is missing is the station master's whistle and the call of 'all aboard' to begin this latest journey towards a new creative direction in luxury fashion. We are witnessing a continuous reshuffling of creative directors; only a few weeks ago, news broke that Pierpaolo Piccioli, after years at the helm of Valentino–eight of these alongside Maria Grazia Chiuri, who left the brand in 2016 to join Dior–was moving to Balenciaga (Kering). A year prior, Alessandro Michele took the creative lead at Valentino, after Piccioli's departure in 2024. Michele left Gucci in 2022, subsequently replaced by Sabato De Sarno, who served as the Florentine brand's creative director from 2023 to February 2025, shortly before Demna Gvasalia's appointment. Gvasalia, in turn, vacated the position at Balenciaga, which was then 'assigned' to Piccioli. We'll stop here, but the merry-go-round of appointments in recent months has, of course, been much more extensive. It is perhaps worth remembering the arrival of Dutch designer Duran Lantink as the new permanent creative director of Jean Paul Gaultier, perhaps one of the few truly new entries into the Olympus of fashion in recent times. Not that Lantink is a novice; on the contrary, the designer, already shortlisted for the LVMH Prize in 2019 and winner of this year's Woolmark Prize, has designed pieces for artists such as Beyonce, Doja Cat, Paris Hilton, Billie Eilish, and Solange. Let's just say he's a fresher name. Sabato De Sarno Credits: Courtesy of Gucci, ph Riccardo Raspa The question that arises at this moment, however, is not so much whether in fashion, as in cinema, there is a famous 'inner circle' of names that move from one label to another yet always remain in the spotlight at one brand or another, but how much this sometimes frantic alternation can really contribute to the growth of brands. Or whether it contributes to the loss of the label's DNA and the partial recycling of loyal customers (who no longer recognise themselves in the brand), rather than a real expansion of the target audience, which is what, hopefully, the top management of the brands that move creative directors from one brand to another are aiming for. There is no shortage of choice, given that in LVMH's fashion and leather goods division alone, there are Louis Vuitton, Christian Dior, Celine, Loewe, Kenzo, Givenchy, Fendi, Emilio Pucci, Marc Jacobs, Berluti, Loro Piana, Rimowa and Patou; while Kering today has, in the fashion segment, Gucci, Saint Laurent, Bottega Veneta, Balenciaga, McQueen and Brioni. Kering deputy CEO: 'There must be mutual trust between CEO and creative director' In this regard, on May 22 in Milan, during the Changemakers in luxury fashion meeting, organised by Camera Nazionale della Moda Italiana (CNMI) and Zalando, Francesca Bellettini, Kering's deputy CEO, stressed: 'There must be mutual trust between the CEO and creative director, but each must have their role with mutual respect.' In complex times like the ones luxury is going through, brands must be true to their DNA and 'generate appeal and desirability thanks to creative directors'. But this trust, instead of consolidating over time, season after season, seems undermined in a short time and influenced by a turnover that, these days, has to do with the crisis, weak demand and the complicated geopolitical situation. Even the authenticity, transparency and coherence demanded by consumers and mentioned just two days ago by Matteo Lunelli, president of Altagamma, during the foundation's shareholders' meeting, do not always seem to be at the top of the list of priorities for brands. Pierpaolo Piccioli, creative director of Balenciaga Credits: Courtesy of Kering and Balenciaga, ph David Sims Demna Credits: Courtesy of Kering This article was translated to English using an AI tool. FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@
Reuters
5 days ago
- Business
- Reuters
European shares rise as US court ruling on Trump tariffs boosts sentiment
May 29 (Reuters) - European shares climbed on Thursday as a U.S. trade court's decision to block President Donald Trump's proposed tariffs sparked a risk-on sentiment across global markets. The continent-wide STOXX 600 index (.STOXX), opens new tab was up 0.4%, as of 0715 GMT, with regional indexes also trading in the green. Germany's DAX 40 (.GDAXI), opens new tab rose 0.5% to hover near a record high. The Court of International Trade ruled that Trump overstepped his authority by imposing the April 2 across-the-board duties on imports from U.S. trade partners. On Wall Street, stock index futures rose by more than 1.5% as the court's decision provided some relief from persistent trade uncertainties. Overall sentiment was also lifted by AI bellwether Nvidia (NVDA.O), opens new tab, which surpassed quarterly sales expectations in after-hours trading on Wednesday. European AI-exposed stocks such as ASML ( opens new tab and Schneider Electric ( opens new tab each gained about 3%, while the region's technology index (.SX8P), opens new tab led sector gains with a 1.7% rise. European carmakers, sensitive to tariff-centric pressures, rose in early trading. Shares in Stellantis ( opens new tab gained 2.5%, Porsche (PSHG_p.DE), opens new tab up 1% and Volkswagen added 1.2%. Investors also favoured luxury stocks, with Kering ( opens new tab, Christian Dior ( opens new tab and Burberry rising between 3% and 3.6%.
