Kering Group CEO Talks About The Price Difference Of Luxury Goods

According to reports, Kering Group Chairman and chief executive officer Fran C ois-Henri Pinault expounded the group's attitude on this issue at the recent annual general meeting of shareholders.

The group adheres to the strategy of "vary from brand to market". The core is: the pricing method depends on the specific conditions of each brand product mix, and the primary task is to ensure the absolute value of all brand profits.

Take the Bottega Veneta new Olimpia handbag as an example, the bag was first released in China in April and will be launched in other parts of the world in May.

Specific products such as this particular brand will adopt a unified global pricing.

Other products generally follow the "Asian price cuts".

"Of course, in order to protect the interests of European local customers, the increase should be moderate.

In addition, some products belong to the new season products, which should be adjusted during the season.

It is pointed out that the price discrepancy between Asia and Europe is inevitable because of the differences of value-added tax, pportation cost and import tariff.

The original price difference is only about 30%, which is quite natural. It will not lead to a significant shift in consumption from one country to another.

But now

The price differential has risen to 60% or even 70% (implying that there is a need for price adjustment now).

Although the sales growth of Kering group slowed down last year due to the overall decline in luxury sales, group shareholders are still unanimous in affirming Pinault's contribution to the group and offering generous remuneration package.

In 2014, the total annual salary of Pinault was 5 million 460 thousand euros, up from 4 million euros in 2013.

The fixed salary is 1 million euros, the floating salary is 939 thousand euros, and the long-term performance bonus is 2 million 650 thousand euros.

Although the flagship brand Gucci continued to deteriorate in the previous quarter, its sales fell by 7.9% compared with the same period last year, exceeding the 3% to 6% expected by the analysts, and Pinault said that there are already positive signs that Gucci's rectification measures will achieve significant results in the second half of this year.