Latest news with #TassiloHummel
Yahoo
29-07-2025
- Business
- Yahoo
Kering's quarterly sales weaker than expected, Gucci down 25%
By Mimosa Spencer and Tassilo Hummel PARIS (Reuters) -Kering, the French group that owns fashion labels Gucci and Saint Laurent, reported on Tuesday a 15% drop in quarterly revenues, falling short of market expectations as the luxury sector grapples with a prolonged slump. Sales in the second quarter totalled 3.7 billion euros ($4.3 billion), down 15% on a comparable basis, missing a Visible Alpha consensus estimate among analysts for a 13% drop cited by UBS. Gucci, which accounts for the bulk of group profits, reported sales of 1.46 billion euros, down 25% year on year. Kering, whose shares have lost around 60% of their value over the last 24 months, has struggled with falling sales for over two years. Last month, it said it had hired former Renault CEO Luca de Meo as its next chief executive from September. A newly-agreed 15% tariff rate on all European Union exports to the United States, a key market where Kering makes over 20% of its sales, will add to headwinds. "The tariff impact is perfectly manageable for us", Armelle Poulou, Kering's finance chief, told journalists. Kering's brands, which also include smaller labels Bottega Veneta and Balenciaga, have already raised prices globally and more specifically in the United States, where Poulou said the company was taking a measured approach with a close eye on consumer sentiment. "There could be a second wave of price adjustments in the autumn", she said. The French group controlled by the billionaire Pinault family reduced its net debt in the first half of the year to 9.5 billion euros from 10.5 billion at the end of last year, largely due to real estate sales.
Yahoo
29-07-2025
- Business
- Yahoo
Exclusive-Pinaults' Artemis says not facing financial strain despite Kering's woes
By Tassilo Hummel PARIS (Reuters) -A jump in standalone debt at Artemis, the Pinault family company that controls Gucci-owner Kering, is a "temporary spike", and the company is not facing any liquidity problems due to a drop in dividends from Kering and other assets, it told Reuters. The investment vehicle also said that none of its debt was tied to Kering's share price performance in the terms - or covenants - agreed with lenders, as some investors have speculated. Privately-owned Artemis, chaired by outgoing Kering boss Francois-Henri Pinault, is the top investor in the French fashion and leather goods heavyweight, with a 43% stake, and controls it through a majority of voting rights. It has become the subject of increased scrutiny from investors after Reuters reported it had accumulated high debt across its portfolio as it sought to diversify investments. Some analysts are concerned the high debt level could limit Kering's ability to deliver a turnaround at struggling flagship label Gucci, at a time when major rivals such as Louis Vuitton owner LVMH are investing heavily in their brands. "We have no liquidity problems," Artemis said in a statement, responding to Reuters questions about its finances. It added that the holding company had less than 500 million euros ($577 million) of debt maturing over the next two years, and more than one billion euros of available cash. DEBTS AND DIVIDENDS Artemis, which also owns 54% of Hollywood talent agency CAA and a 29% stake in sportswear maker Puma, has historically kept a low media and investor profile. But annual accounts published alongside a recent bond issue give some insight into its finances. Artemis' consolidated group debt stood at 26.7 billion euros at the end of 2024, almost double the amount of two years earlier. Kering, the largest asset consolidated in the accounts, held around 14 billion euros of total debt at the end of 2024, built up in large part to finance an acquisition strategy spearheaded by Pinault to counter a slowdown at Gucci. On a standalone basis, which excludes operating businesses such as Kering, Artemis' debt was 7.1 billion euros as of May 31, the company said when announcing the bond issue last month. Last year, Artemis paid 227 million euros in net interest charges to service its growing debt pile, Artemis' 2024 accounts show, up from just 60 million euros the year before. In its statement, Artemis said the 7.1 billion euros of debt was a "temporary spike, only linked to the acquisition of CAA in 2023", which it said was driven by a desire to diversify beyond Europe and the luxury industry. The value of the majority stake in the Hollywood talent agency, which represents A-listers like the Obamas and Scarlett Johansson, was $3.7 billion in Artemis' 2023 accounts. The whole agency has been valued at $7 billion. Just as Artemis is spending more to service its debt, dividend payments from Kering, which accounted for more than 80% of its financial income in the last two years, are falling. Kering slashed total dividends paid on its 2024 earnings, to 739 million euros from 1.7 billion euros a year earlier, after a string of profit warnings. Barclays analysts estimate the payout may drop to 364 million euros in 2026 due to Kering's poor performance this year. Artemis is entitled to roughly 43% of Kering's payout. Kering declined to comment. Puma, which in the last two years contributed 35 million euros to Artemis' annual dividend income according to Artemis' accounts, also cut dividends paid out this year by roughly a third and warned it would be loss-making in 2025. COVERING NEEDS "It is incorrect to assume that we are dependent on Kering's dividend flows to finance the company. In fact, other companies in the Group pay regular and significant dividends which cover most of our debt servicing needs," Artemis said, without elaborating. Besides its stakes in Kering, Puma and CAA, Artemis owns historic auction house Christie's, some exclusive wineries and a company offering polar cruises, all of which are unlisted. Without Kering, Artemis' businesses generated a recurring operating profit of 48.9 million euros in 2024, up from a 115-million-euro loss the year before, its 2024 accounts show. Kering shares have lost close to 60% of their value over the last 24 months, while Puma shares are down 66% in the same time. In a recent note focusing on Artemis's finances, BofA analysts said trading activity and feedback they had received suggested some investors were worried that Artemis' loans might have covenants tying them to Kering's stock performance. Artemis said such speculation was misplaced. "The Group has no financial covenants linked to Kering's share price", it said. June's bond issue tied to Kering's share performance - worth 400 million euros and used to refinance an old bond linked to Puma's stock - was oversubscribed, Artemis said. ($1 = 0.8674 euros) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
08-07-2025
- Climate
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Firefighters battle wildfire threatening French city of Marseille
By Tassilo Hummel MARSEILLE, France (Reuters) -Hundreds of firefighters battled a fast-moving wildfire that reached the outskirts of the southern French city of Marseille on Tuesday, forcing people to stay indoors and the nearby airport to close. Aided by firefighting helicopters and aircraft, the firefighters had the blaze under control by evening, officials said, but a forecast of more strong winds meant it might yet advance further towards France's second most populous city. The fire, fanned by winds of up to 70 kph (43 mph), could be smelt in the centre of Marseille as thick clouds of smoke hovered over the city on the Mediterranean coast. "It's very striking - apocalyptic even," said Monique Baillard, a resident of Les Pennes-Mirabeau, the town north of Marseille where officials said the fire started on a highway. The fire has burnt through 700 hectares (1,730 acres) and was considered to be under control even though it is still burning, regional prefect Georges-Francois Leclerc said. About 20 buildings have been at least partly hit by the fire but no fatalities have been reported and hundreds of homes have been saved by firefighters, he said. Over 700 firefighters were battling the blaze, aided by firefighting helicopters and aircraft. Wildfires, which have become more destructive in Mediterranean countries in recent years and attributed to climate change, were also raging in northeastern Spain, where large parts of the country were on high alert for fires. There were also fires last week on the Greek island of Crete and in Athens, as much of Europe sweltered in an early summer heatwave. As the fire was spreading, residents of Marseille received official alerts on their phones telling them to stay at home and put damp cloths on any openings. "As we speak, it's a battle," Payan said, likening tackling the wildfire to "guerrilla warfare". "We're waiting to see what happens overnight, because that's critical too. Everything is strategic: wind speed, humidity, nightfall — every factor matters. Once again, it's extremely complex, and the work is incredibly difficult." RESIDENTS CONFINED Two residents of the 16th borough, in the north of Marseille, near where the fire started, described how scared they had been. "It was dangerous, a lot of very dark smoke, we were really afraid. Police and firefighters did a great job," said one resident, who did not give his name and said things now looked under control in his neighbourhood. Residents were told not to evacuate unless ordered so that roads could be left clear for rescue services. "At this stage, populations must remain confined," the Provence-Alpes-Côte d'Azur prefecture posted on X. "Close shutters, doors, keep your property clear for emergency services, and do not travel on the roads." Anne, a 51-year-old woman who works in Marseille and lives on the outskirts, said by phone: "The sky is grey with ash, and the smell of fire is very strong in the centre of Marseille." In the coastal neighbourhood of l'Estaque, restaurant owner Simon Epenmbia said he was huddling in the restaurant with his family and neighbours. "We are relatively close to the sea, where we feel safer for now and there is less smoke," he said. "I also saw other people who came here towards the beach and are sheltering in their cars." A spokesperson for Marseille airport, France's fourth-busiest, said planes had not been taking off or landing since around midday and some flights had been diverted to Nice, Nimes and other regional airports. It was unclear when it would reopen. Many train lines heading to and from Marseille were suspended. Some roads and highways were also shut. A wildfire that started near Narbonne, in southwestern France, was also still active on Monday. Some 2,000 hectares have burnt there, the local prefecture said.
Yahoo
12-06-2025
- Business
- Yahoo
Exclusive-French cognac makers offer China minimum import prices to fend off tariffs
By Tassilo Hummel and Emma Rumney PARIS/LONDON (Reuters) -Negotiators representing French cognac producers suggested minimum prices for exports to China of between $20 and around $300 per litre as an opening bid in talks aimed at ending a tariff stand-off with China, a document seen by Reuters shows. The minimum prices are part of efforts to avoid permanent tariffs of up to 39% amid tense negotiations with China's commerce ministry, which has opened an anti-dumping investigation focused on the sector. They were sent to producers several weeks ago for their approval by a Paris-based law firm negotiating on the spirit makers' behalf. A spokesperson for the law firm, GIDE, declined to comment. The industry, grappling with falling sales and simultaneous tariff threats from the United States, its other key market, has been fighting to secure a deal with China since Beijing first threatened to levy the duties in January 2024. The move came amid a wider trade dispute with the European Union after it imposed tariffs on imports of Chinese electric vehicles. A flurry of political meetings in Paris and technical discussions in Beijing last week raised hopes that a settlement of the trade spat was imminent. But the talks ended with no deal, leaving just weeks to go before a July 5 deadline for Beijing to wrap up its anti-dumping probe. Chinese authorities subsequently announced that the industry had made a voluntary "price pledge" and it was reviewing its terms. The price list seen by Reuters included a "minimum import price" for different bands of cognac defined by how long the spirit has been aged, ranging from two years for the cheapest "Very Special" (VS) cognacs to the most expensive "Extra Extra Old" (XXO), aged 14 years or more. Under the offer, VS cognac would have a minimum import price of 144.70 yuan ($20.16) per litre, while "Very Superior Old Pale" (VSOP), aged for at least four years, would be priced at 177.92 yuan. High-end "Extra Old" (XO) would cost 526.52 yuan to import, with the XXO category, where prices reach thousands of dollars per bottle and more, costing at least 2,126.07 yuan ($296.16) per litre. France's BNIC industry body declined to comment on the prices, citing confidential negotiations. "We keep waiting and hoping for a good outcome," a BNIC spokesperson said. The prices in the document refer to the price paid for cognac by importers in China, with distributors, wholesalers, retailers and consumers paying more to buy it. Reuters was not able to determine current import prices across the sector, led by LVMH's Hennessy, Pernod Ricard's Martell and Remy Cointreau's Remy Martin. Hennessy's VS cognac currently sells to consumers for around $100 per litre on Tmall. Remy Martin's cheapest label meanwhile fetches around $110 to $350 for its XO cognac. TALKS ONGOING Chinese authorities have already imposed steep provisional duties on imports of European brandy - mostly made up of French cognac - in the dispute with the EU. Laurence Whyatt, analyst at Barclays, said it wasn't clear the industry had made a major concession in the price offer seen by Reuters. "Import prices are usually a third to a half of the retail price, so the prices detailed appear commensurate to the existing import prices," he said. However, the document seen by Reuters reflected the sector's opening offer and talks are ongoing. A source familiar with the discussions said after weeks of back and forth, the two sides seem potentially close to agreement, but another person said the talks were tough and the sector was being pushed to make a bad deal. A settlement with China, the most important export country by value for France's $3 billion cognac industry, that removes the duties would be a boon for the sector, whose growth prospects have been hurt by the tariff dispute. ($1 = 7.1788 Chinese yuan renminbi) Sign in to access your portfolio
Yahoo
28-05-2025
- Business
- Yahoo
Seeking to cure Gucci addiction, Kering's Pinault created a debt problem
By Tassilo Hummel and Elisa Anzolin PARIS -In trying to reduce Kering's over-reliance on struggling flagship label Gucci, French billionaire Francois-Henri Pinault has created another problem, as a string of acquisitions piled up debts just as the industry entered a prolonged slump. Those debts are getting harder to manage, with Kering shares down 60% over the past two years and U.S. President Donald Trump's tariff threats dashing hopes of a sector rebound, and are weighing on the group as it vies with deep-pocketed rivals. Pinault's family holding Artemis, which controls Kering and also has a stake in sports brand Puma, is also heavily indebted, and will likely have to pay back 500 million euros ($567 million) to investors in cash following Thursday's cut-off date for a convertible bond, after Puma shares underperformed. Kering may also need to find billions of euros to buy the remaining stake in fashion house Valentino as soon as next year. The company is cutting costs and selling stakes in properties, but if the debt situation does not improve, it could face a third credit rating downgrade in three years, two Kering bondholders told Reuters, declining to be named. That could further hamper its ability to revive Gucci and compete with the likes of Hermes, Chanel and LVMH, which have little to no debt and are investing heavily in their brands. "This is the worst of times, because you've got a fall in sales, which is going to translate into a fall in profit, and at the same time, interest rates are rising. So they can't renegotiate their debt," said Eric Pichet, economics professor at the Kedge business school in France. Kering declined to comment for this story. Pinault, who in 2005 took the helm of the conglomerate founded by his father Francois, enjoyed years of spectacular growth at Kering thanks to Gucci and the "ugly-chic" designs of its former creative director Alessandro Michele. But as shoppers tired of Michele's fur-lined loafers after the pandemic, Pinault sought to diversify through acquisitions, including a 30% stake in Valentino, high-end perfume maker Creed, prime real estate, and - via Artemis - a Hollywood talent agency. The strategy left Kering with net debt of 10.5 billion euros at the end of 2024, up from close to nothing in 2021 and half its market capitalisation, and an even larger debt pile at Artemis, according to the latest available filings. SHOPPING SPREE Since the pandemic, Pinault has struggled to choose between bold fashion creations and more classical looks as the best way to revamp Gucci, a person who advised Pinault and other Kering executives during that period told Reuters. With Kering's moneyspinner sagging, Pinault moved to snap up perfume maker Creed for 3.5 billion euros and 30% of Valentino for $1.9 billion in 2023, both in cash. In less than two years, Kering also splashed out roughly 4 billion euros on properties including on New York's Fifth Avenue, and on prestigious shopping streets in Milan and Paris. A company insider said Kering paid chunky premiums to outbid rivals, fearing its own labels - which also include Yves Saint Laurent and Balenciaga - could lose access to prime sites. Kering, whose free cash-flow fell by almost 30% in 2024 to 1.4 billion euros, is now rushing to sell stakes in these buildings, hoping to free up 2 billion euros in cash by 2026, it told analysts in February. But the stakes may go for less than their book value. Kering recently took a 100-million-euro charge on the sale of a 60% stake in three Paris properties, its 2024 annual report shows. There are other pressures too. Kering has said it intends to fully acquire Valentino in 2028 from luxury fund Mayhoola, backed by Qatar's royal family. But put options included in the deal might force Kering to buy the remaining 70% stake as soon as May 2026, company filings show. This could add 4 billion euros to Kering's cash needs, depending on Valentino's performance. Kering said in April it was confident cost-cutting measures, including store closures and redundancies, would enable it to fund an early deal, if necessary. Plus it can pay for part of the remaining stake with up to 3 million Kering shares, or 2.4% of its equity. Mayhoola would welcome a stake in Kering as part of its expansion strategy, a source close to the fund told Reuters. But this option would only finance a fraction of the overall price tag, based on Kering's current market value. DOWNGRADE RISK Kering's adjusted net debt, which includes rental lease liabilities, stood at 3.8 times core earnings (EBITDA) at the end of 2024, ratings agency S&P told Reuters, while declining to comment on the timing of any potential ratings review. UBS analysts estimated in a recent note that Kering's leverage ratio could reach 4.1 times at the end of 2025. Surpassing four times typically increases the chances of a rating downgrade, one of the bondholders told Reuters. Replicating the acquisition strategy at his family holding company, 63-year-old Pinault, who is married to Mexican-American actress Salma Hayek, used Artemis to buy a 53% stake in talent agency CAA for 3.5 billion euros, according to Artemis filings. Artemis' own net debt, which includes Kering's, stood at 20.2 billion euros at the end of 2023, more than double the previous year, the filings - the latest available - show. While Kering, which usually distributes at least half of its net income to shareholders, could in theory cut its dividend to save cash, that would only compound problems for Artemis. ($1 = 0.8813 euros) (reporting by Tassilo Hummel in Paris, Elisa Anzolin in Milan. Editing by Lisa Jucca and Mark Potter) 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
