KERING

Analysis of Kering share price

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Elements that can influence the price of this asset:

Analysis N°1

Firstly, it is known that the Kering Group's strategy for its future development is primarily based on strategic purchasing. It is therefore more than important to closely follow such announcements, which could enable Kering to gain numerous market shares and thus see its share price rise.

Analysis N°2

The positioning of this group on emerging markets is also a major challenge, the success of which will thus have an undeniable influence both on the Kering group's results and on the development of its share on the stock market.

Analysis N°3

Of course, the Kering Group also faces certain threats that could hinder its development and growth. This is notably the case with the problems of counterfeiting of its products, which are becoming increasingly frequent and invading the market. These counterfeit products could have a very negative influence on the Group's brand image.

Analysis N°4

Finally, one must also take into account the rise in production costs and in particular the cost of labour, which could force Kering to increase its selling prices in the long term in a market less and less inclined to spend on luxury goods. The group's financial situation is thus threatened.

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General presentation of Kering

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.

Analysis of Kering share price
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The major competitors of Kering

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 major partners of Kering

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.

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The factors in favour of a rise in the Kering share price:
  • 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.
The factors in favour of a drop in the Kering share price:
  • 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.
The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions.
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