Bottega Veneta resurgent in 2019
Bottega Veneta is back in the limelight, growing again after a three-year slump. In 2019, Bottega Veneta generated a revenue of €1.168 billion, equivalent to a 5.3% increase over the previous year, and a 2.2% one in like-for-like terms. The label was once regarded as Kering's star performer, having posted exponential growth rates until 2015, after being acquired by the French group in 2001, but its sales slumped between 2016 and 2018. The therapy undergone by Bottega Veneta since then has clearly been effective.
In a meeting with financial analysts, Kering’s senior executives presented the luxury giant's annual results, and declared themselves satisfied with the Italian label’s promising performance, which vindicates the strategic decisions taken and the investment made by the group in the last two years. In particular, the June 2018 appointment as creative director of Daniel Lee, the former ready-to-wear design director at Céline.
Lee shone at the British Fashion Council’s recent Fashion Awards 2019, bagging four prizes, including those of British designer of the year and of ‘best label’ for Bottega Veneta. In a few seasons, Lee has managed to redefine the label’s style. While staying true to its highly sophisticated DNA, he injected a touch of the subversive, subtly transforming the chic, ultra-refined bon-ton style developed over the course of 15 years by his predecessor Tomas Maier.
Some of Lee's creations, like the famous oversize clutch bag called ‘Pouch’, or the quilted sandals, have been an instant hit with fashionistas, making Bottega Veneta an object of desire again. Lee’s amusing reinterpretation of the label’s famous intrecciato, its signature woven leather pattern, which he introduced in XL size on shoes and accessories, was also popular.
In the same vein, the new, ultra-sexy Bottega Veneta ad campaign marks a turning point for the label, confirming its new positioning as directional and hedonistic, no longer sheltered behind a thin veil of elitism. As Kering’s boss François Henri-Pinault said during the meeting, “[Bottega Veneta] grew within a niche market segment which enabled it to become successful. Now it has become a global brand, and has broadened its clientèle. I regard this as a new beginning.”
According to Kering's CFO, Jean-Marc Duplaix, the Italian label has chiefly benefited from the fresh interpretation of its design style by [Lee], and the impact of new products, which accounted for 60% of the label’s range in the last quarter of 2019. A quarter in which sales for Bottega Veneta grew by 9.4%, driven by strong performances both by its monobrand stores and by the wholesale channel. “We are carrying out long-term investments in ready-to-wear and footwear, and also on the retail network, with store openings, renovations and relocations,” said Duplaix.
In 2019, Bottega Veneta also overhauled its senior management team, with the arrival of a new CEO, Bartolomeo Rongone, in September, and of a new EMEA general manager, Massimiliano Brunazzo.
In 2019, Bottega Veneta's recurring operating income was €215.2 million, down 14.3% compared to 2018. Recurring operating margin was 18.4%, “chiefly as a result of the targeted, controlled increase of certain operating costs, with the goal of supporting the label in its transformation and relaunch,” stated the company in a press release.
Geographically, Bottega Veneta is still rather weak in Asia, where retail sales lost 3% in the Asia-Pacific region and 5% in Japan. The label was especially affected by the social unrest in Hong Kong, where in 2018 it generated 10% of its revenue.
“This is a very important market [for Bottega Veneta], and the Hong Kong slump could not be compensated, despite the fact that the new collections were received very favourably in South Korea,” said Duplaix. “It will take longer for the Asian market to appreciate the label's new aesthetic. On the other hand, the new collections have been very well received in the more mature markets, driven mostly by a local clientèle,” he added.
Sales by the label’s monobrand stores grew by 7% in continental Europe, by 6% in North America and by 18% in the rest of the world. Retail sales, which altogether accounted for 81% of Bottega Veneta’s total revenue, rose by 1% in 2019, while they increased by 7% in the wholesale channel.
In the year’s last quarter, the label grew by 20% in Europe, by 19% in the USA, by 43% in the rest of the world and by 20% in the wholesale channel. These results bode well for 2020, although Bottega Veneta will have to take into account the impact of the coronavirus pandemic.
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