General presentation of the Kering company :
The French group Kering is currently one of the big names in the sector of the design, production and sale of luxury goods and sports articles. However, the activities of this group can be divided into three main categories according to the share of turnover they generate.
Luxury goods account for more than 68.4% of the total turnover of the Kering company, with in particular leather goods, ready-to-wear, watches, shoes, jewellery, glasses, perfumes and cosmetics. These products are marketed under various brands such as Gucci, Bottega Veneta, Yves-Saint-Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, McQ, Stella McCartney, Tomas Maier, Boucheron, Dodo, Girard-Perregaux, JeanRichard, Pomellato, Qeelin and Ulysse Nardin. At present, the Kering group has more than 1,305 boutiques throughout the world, most of which are located in Western Europe and particularly in France with 338 boutiques in Europe, then 248 boutiques in Japan and 213 boutiques in North America. The remaining 506 boutiques are located in other countries around the world.
Sporting goods generate 31.4% of Kering's overall turnover with mainly sports shoes, sports clothing, sports equipment and accessories. These products are marketed under the brand names Puma, Volcom and Electric. Finally, a few ancillary activities generate the remaining 0.2% of turnover.
Geographically, the Kering Group generates nearly 37.9% of its turnover in Europe, the Middle East and Africa. 9.9% of this turnover is generated in Japan. 25.9% of turnover is generated in Asia-Pacific, followed by 22.1% in North America and 4.2% in South America.
Knowing the competition of the Kering share :
If you are interested in the luxury sector and wish to invest in the Kering share price, you are probably already aware that this sector is very closed and that there are few competitors in this sector. However, although the Kering Group has a strong presence throughout the world and is one of the big names in the international luxury goods industry, it is not the only one to covet these market shares. In order to carry out a complete and relevant analysis of the Kering share, you must of course carry out a fundamental analysis that takes into account the competition in this sector of activity. Thus, the development of the market share of each of these companies as well as important events concerning it such as purchase or sale transactions, as well as the financial results and all news from these groups will have an undeniable influence on the share price on the stock exchange.
Today, the Kering Group faces three main competitors with :
- The Hermès group: a French company specialising in the design, manufacture and marketing of luxury products such as leather goods, ready-to-wear, perfumes, watches, tableware and lifestyle products.
- The LVMH group: which is also a renowned French brand and the world leader in luxury goods with several business areas such as high-end wines and spirits, fashion, media and distribution.
- Richemont: which is finally the third largest group in the world luxury industry after LVMH and Kering.
The strategic alliances set up by the Kering Group :
Of course, the Kering group did not climb the podium of the largest luxury companies without an intelligent strategy, which included certain associations with other companies in similar or complementary sectors. Here you can find out more about the most recent alliances and partnerships that have had the greatest influence on the share price on the stock exchange.
- Yoox: In 2012, for example, the Kering group has created a joint venture with Yoox with the aim of launching 6 brands online. Thanks to Kering's prestigious brands, Yoox was able to launch and then maintain its e-commerce activity and gain notoriety, and Kering benefited from a quality online showcase which boosted its sales.
- Vogue Italia: Kering had previously signed a partnership with Vogue Italia, which was renewed in 2016. This alliance concerns the Empower Talents programme, which aims to offer internships within the Kering group and its various brands in the luxury sector.
- Cartier: Finally, more recently, in 2017, Kering's Kering Eyewear subsidiary joined forces with the Cartier brand, which belongs to its competitor Richemont, in a strategic partnership aimed at developing, producing and marketing eyewear under the Cartier brand. This collection is then added to the other eyewear collections marketed by the group, most of which are brands already owned by Kering.
Analysis of the Kering share price
A first look at the historical stock market graphs of the Kering share confirms that this stock benefits from a long upward trend that has allowed it to go from the €85 level in 2008 to more than €400 in 2018, which represents a very significant gain in points. But of course, this rise did not happen in one go and several medium and long term upward and downward movements punctuated this fundamental trend.
The period began with a slight drop in prices between March and December 2008, with the price dropping from €92.86 to just €40. But the beginning of 2009 marks the beginning of a long and stable upward trend despite its lack of volatility. This rise will lead the stock to break the €100 resistance in April 2010 and will continue to rise until reaching a first high of €129.80 in March 2012. At that point, a temporary bearish turnaround will take place, lasting until July 2012 and bringing the stock back to the €111 level.
From the beginning of autumn 2012, the Kering share price begins a new and interesting rise to the level of €178 in March 2013 and then to €183.10 in August of the same year. As before and as the major resistance of €200 approaches, the trend then reverses and the share drops to €137.35 in March 2014, probably due to profit-taking. But very quickly, the rise resumed and allowed the stock to reach the level of €193.30 in March 2015.
Unfortunately, this movement will be short-lived and the share price will then drop again, returning to the €142 level around June 2016. The summer of 2016 will then be the starting point of a new upward trend that will be stronger and more volatile than the previous ones that can be seen at first glance on the stock charts. This rise has enabled the share to successively overcome several major technical resistances with first the €200 threshold, which will be broken in October 2016, and then the €300 threshold, which will be crossed in June 2017. Finally, the Kering share will also manage to break the €400 threshold between October 2017 and January 2018.
But this resistance seems more difficult to break than the previous ones and nothing indicates for the moment that this strong upward trend will occur. It will indeed be necessary to wait a few months before knowing in which direction the Kering share price will evolve.
What are the strengths and advantages of the Kering share as a stock exchange asset?
- Of course, the Kering Group's first asset is of course its strategic positioning in the world of luxury goods. Indeed, Kering is currently the world number two in this sector of activity in terms of turnover, just after the LVMH group. It thus benefits from a very strong reputation throughout the world.
- On the other hand, the Kering Group offers a wide variety of products and brands in different subfields. This division of the group's activities into different divisions means that the company is less exposed to the risks associated with a single group of products and activities. Kering also benefits from the historical notoriety of some of its brands, which are known throughout the world.
- Finally, it should be pointed out that the results of the Kering group have shown constant growth for several years, particularly in terms of its net result. This reliable and healthy financial situation is reassuring to investors and encourages them to take purchase positions.
What are the weak points and disadvantages of the Kering share as a stock exchange asset?
- Firstly, and unlike its most serious competitors, Kering has a reduced liquidity which limits its investment capacity somewhat.
- We also regret the group's very high exposure to European markets, since it is in this geographical area that the group generates the largest share of its turnover. Tourism in this region of the world thus also has an undeniable influence on the level of sales and profits.
- The Kering Group is also sensitive to exchange rates between the euro and other major currencies on the foreign exchange market. These exchange rates and their variations can thus have strong consequences on its profitability and therefore on its share on the stock exchange.