Bonjour. Good morning. I'm pleased to welcome you here to the presentation of Kering Group's 2015 full-year results. Before giving the floor to Jean-Marc Duplaix, our Chief Financial Officer, I would like to talk to you briefly about 2015. Later on, with Jean-François Palus, we'll also be reporting on the implementation of our strategy at Kering. As you know, 2015 was a year of major upheavals worldwide. We saw a slowdown in Chinese growth, turbulence in financial and currency markets, and we saw renewed geopolitical tensions. Luxury also felt the effects of these upheavals. However, we can say our activity is global, and our vitality very much hinges on economic and tourism flows, and also a general feeling of safety and wellbeing on behalf of our customers. These changes have not in any way changed our beliefs.
Our industry will continue to reap the benefits of positive trends, basic overall trends, both in terms of the economy and population growth. Upheavals in 2015 weren't isolated events. We can say that short-term market growth is probably going to be slower than was the case toward the beginning of the 2010s. For Kering, 2015 sees a transition to a new phase of our development. We made the most of a cycle of strong growth to really strengthen our brands portfolio and mainly to extend our retail network. We're now located in the most important cities and locations worldwide. Our priority is to tease out further value from all of this. We'll be doing this specifically by further increasing our sales in existing stores that will have a direct impact on our margin growth. We'll also better make use of group-wide synergy.
We've also further built our commitment in terms of social and environmental responsibility. You know this is an essential component of our strategy and a key way that we stand out from others. I often say this in English, I term it "sustainable luxury is smart luxury." Throughout 2015, we've stepped up the necessary measures to keep pace with changes in our industry and strengthen our operational performance. For instance, look at Gucci and how quickly and how boldly we carried out transformation of Gucci. That's the responsiveness that's made it possible for us to see our performance gradually improve in 2015. Our figures in the second half show that clearly. I'd like to give the floor to Jean-Marc. He will be reviewing with you our 2015 results.
Good morning, ladies and gentlemen. To begin with, let's look at the main aggregates regarding the group's operational performance in 2015.
First of all, a good growth dynamic of revenues, EUR 11.6 billion revenues in 2015. I make the following comments on this. The group booked growth in sales of 15.4% during the fiscal period. This growth clearly sees the effect of positive currency effects contributing about nine points to annual performance. Plus, there is not a highly significant scope effect due to the acquisition and consolidation of Ulysse Nardin as of 1 November 2014. Organic growth, like-for-like, is 4.6%. That's the best performance the group has seen in the last three years. A second comment. Let's talk about overall geographical footprint. Revenues remain well-balanced. The distribution hasn't changed much from one year to the next, in spite of the fact there are major contrasts from one region to another throughout the fiscal period.
Western Europe and Japan, making up respectively 31% and 10% of revenues, saw like-for-like growth near to or equal to 10%. North America and Asia Pacific, contributing 23 and 26% to group revenues, saw moderate growth and sometimes slightly negative growth. I'll come back to these differences in greater detail in a few moments. My third comment. As you can see on the bottom left, momentum has been fairly coherent and consistent within luxury and sport and lifestyle in the second half. We saw increased growth in both of those divisions. During the full period, luxury saw growth of 4.1% like-for-like, and sport and lifestyle 5.9% growth. My fourth observation. 2015 saw a strong volatility from one quarter to another. The second and fourth quarters were the most buoyant in our activities in both luxury and sport and lifestyle.
For our luxury brands, growth differences from one quarter to another are partially due to different dynamics and specifics for each brand. In addition, and first and foremost, this is due to a specific feature during the year. Here, I'm thinking, of course, of the major changes in tourism patterns and purchasing locations, which mainly were due to currency fluctuations. I'd like to briefly comment on income and cash flow generation. Recurring operating income, EUR 1.65 billion, slightly down by 1% compared to 2014. This dip was 5% in the first half of 2015. The trend reversed in the second half, with 3% growth in operating income in the second half. Dilution of the margin divided by half compared to the first six months of the year. EBITDA of the group grows by 3% for the full year, reaching over EUR 2 billion.
Growth focused in the second half. More positive trend of EBITDA compared to current operating income is due to the weight of depreciations in conjunction with investments made in the last periods, particularly in the luxury division. Cash flow from operations reaching EUR 660 million this year after the first half, which was down, particularly in comparison with 2014, which was improved by the non-recurring sale of a real estate asset. Cash flow generation substantially improved in the second half, in spite of the ongoing negative effect of currency hedges. Operating cash flow in the second half is EUR 602 million as opposed to EUR 874 million in current operating income. The actions we undertook with an eye to further additional financial discipline reaped benefits in the second half of the year. Let's look in greater detail at our activities. We'll begin with luxury.
In 2015, revenues up more than 16% reported and increased by more than 4% like-for-like. Activity throughout the year boosted by brand momentum in our own stores, which saw growth of 7% for the year, 9% in Q4. Wholesale down slightly for the fiscal period, but back positive, +4% in Q4 under the impetus of Gucci. In light of the performances in our own stores that we operate, we can see that there are major contrasts from one region to another. Business in Western Europe up by 24%. This was supported by strong growth of purchases made by tourists, Chinese and American mainly. There was a peak in the second quarter, an excellent Q3, and then a slowdown in Q4, to some degree due to the attacks in Paris last November. Japan benefited from good domestic consumption and ongoing increases in tourism flows from mainland China.
Our brands saw growth of 14% there in their stores. In Asia Pacific, a downturn of 3% in activity of our stores is due to different situations. Hong Kong and Macau saw a year of basically ongoing deterioration of market conditions. Mainland China continued to be volatile from one quarter to another, one brand to another. Q4 seems to show signs of stabilization, even slight improvement. The rest of Asia saw good momentum driven by Korea, Singapore, and Australia, which benefited from Chinese tourism as well. All in all, for the region, Q4 improved fairly substantially compared to the previous one, with growth of 2%. Lastly, North America. After a good start of the year, trends turned around starting in Q3, particularly due to a strong dollar, which led tourists and some American consumers to make purchases in other regions of the world.
North America books performance was basically flat for the year, just up by 1%. That is the backdrop. Analyzing performance by nationality probably makes more sense than by geography. It is more relevant than ever before. For the full year and for our three main brands, Chinese clientele reduced its purchases in the domestic market and in Asia Pacific, Hong Kong and Macau, substantially down. This drop is more than offset by refocus of tourist spending of Chinese in Japan, more than tripled, and in Europe, where their spending has grown by just about 40%. Business with European and American customers remained buoyant, especially in our Western European stores. Latin American clientele has tended to redirect their consumption toward their domestic markets. Now, let us move on to recurring operating income, EUR 1.7 billion, up 2.5% for the year.
Operating income grew by 5% in the second half alone, thanks to stabilization of Gucci and Bottega Veneta's results. Exceptional growth of Saint Laurent, and we were able to contain any drops by the other brands' contributions. Operational profitability 21.7% for the year, down 290 basis points. This drop is due firstly to combined currency and hedging effects, which had a major dilutive effect. Furthermore, due to a drop on current operating income at constant exchange rates for some brands, particularly watches. Here, the dilution has been contained much more so in the second half. It is on the order of 200 basis points as opposed to 400 basis points in the first half. EBITDA beyond EUR 2 billion, up 5.5% compared to 2014. Operational expenditure, EUR 391 million, up 5%. This growth is to a large degree due to currency effects.
Low growth at constant exchange rates shows we carefully pay attention to organic growth and consolidating existing store networks. Percentage of revenues, operational investments are 5% of sales, as opposed to 5.5% of sales in 2014. Now I would like to run you through the main figures from our luxury brands. Detailed performance, of course, can be seen in an appendix to the presentation today. Let us begin by talking about Gucci with sales of EUR 3.9 billion for the year. Comp like-for-like up 0.4%. Q4 sped it up, reaching almost 5%. Retails, our own retail stores up 3% for the year, 6% growth in the last quarter. Strong performance in Europe and Japan, and improved performance compared to the previous quarter, both in North America and in Asia Pacific. This confirms what we already said at our last results publication, that different performance from region to region seem to be slowing down.
Differences slowed down toward the end of the year. As is customary before and after holiday seasons, there were also sales in stores. They were not more significant than previous years. Made it possible for the brand to finalize transition from seasonal products from one season to the next, to welcome the novelties by Alessandro Michele, particularly in the ready-to-wear, and also continues speeding up renewals in various areas such as small leather goods and handbags, and also stop certain product lines. Wholesale, down 10% for the fiscal period, but became positive as of Q4, once again, slightly faster than expected, thanks to good deliveries of the Croisière collection. Figures of the most recent quarter are very encouraging, confirming the excellent, the beautiful popularity of Alessandro Michele's collections, especially footwear and women's ready-to-wear, and then a ramp-up of novelties in small leather goods.
In the quarter, new collections made up just under 30% of sales. In terms of operating income, my Gucci comments will be quick because they're very similar to what we've already said about the group and luxury division, EUR 1.32 billion, slightly down for the full year, but stable in the last six months. Margin dilution has been limited, especially in the second half, in spite of the continued negative effect of currency and hedging. Bottega Veneta in 2015, still strong performance, but growth somewhat more moderate, 3% like-for-like for the period. Very much an Asian clientele, very high-end positioning, and less of a presence in mature countries. The brand is especially sensitive to any currency fluctuations, price differences, as well as changes in tourism patterns. In Q3, Bottega Veneta saw growth down 3% like-for-like, especially down in Asia Pacific and North America. Revenues almost EUR 1.3 billion.
The brand has reached a size where it needs to redeploy to continue its pace of growth. In terms of products, categories, retailing, many different action plans have been defined to diversify the brand's proposal and its customer base, adapt the size of its retail network and its footprint, move on new opportunities, such as in travel retail. The brand in 2015 maintained a high level of operating income, growing by almost 5%, reaching EUR 375 million, with a margin of 29.1%. Saint Laurent, yet another exceptional year. Revenues reaching almost EUR 1 billion. The brand sees sustained growth throughout the year. Growth in revenues like-for-like was greater than 20% every quarter, including the last quarter, where the growth was 27%. Uniform growth in all distribution channels and product categories and regions, which shows that the brand is very popular and its positioning is right.
As expected, operating income grows significantly by 60%, reaching EUR 169 million. The margin is up 2.4 points at 17.3%. Growth in revenue made it possible to absorb the negative currency hedging effects and really benefit from operational leverage. Other luxury brands had a good fourth quarter, up 11% like-for-like, booking for the full year growth of 3%, driven by the couture and leather goods brands as well as jewelry. Balenciaga, Alexander McQueen, Stella McCartney, in their own networks, saw double-digit growth. Jewelry with Pomellato, Boucheron, and Qeelin also saw double-digit growth. Watches brands were still hit by worsened market conditions, though the overall trend improved in the last quarter. Current operating income for other luxury brands, EUR 133 million, down 10%. Here as well, we see dilution of the margin, which lessened in the second half. Dilution of the margin.
Let's talk about sports and lifestyle activities, emphasize especially Puma's performance, which in 2015 reconfirmed its trajectory of growth in revenue. Results were disclosed yesterday. I'll be brief. Puma saw like-for-like growth in sales of 7% for the year, which is twice the figure for 2014, which means its record revenue performance, EUR 3.4 billion. Repositioning of the offering for performance sports, particularly in footwear, has been beneficial in all regions. Q4 up 12%. This is highly encouraging. Current operating income is a reflection of investments, particularly in marketing, that were carried out to continue relaunching the brand, plus the negative impact of currency trends. In addition, Volcom saw its revenue down slightly in a very negative overall context for action sports, especially in the U.S. All in all, sports and lifestyle saw EUR 3.7 billion in revenues for the year and operating income of EUR 95 million.
From memory, in applying accounting standards, some of our hedging entries are placed under operating income and the remainder under financial income expenses. Taxes, EUR 220 million, almost the same as in 2014. Effective tax rate, which is the taxes proportion of pre-tax earnings, is up 800 BPS, at 32%. This is due to no tax savings from some asset impairments, such as goodwill. Current tax, which excludes taxation of non-recurring items, is 24%. It's up due to several factors such as change in deferred taxes, a changed interpretation of IAS 12 standard, as well as the taxation of some of our hedging gains. The income from discontinued operations, including Sergio Rossi, as well as the repayment of the FNAC super-subordinated bonds issued in 2013 means a profit of EUR 41 million. 2014, the year of finalization of group transformation, EUR 479 million in losses had been booked due to disposals.
Briefly now, some comments on other elements from net income. Other operating income and expenses are a net expense of EUR 394 million. This includes, among other, goodwill impairments, EUR 150 million, mainly at Puma, as well as EUR 192 million of non-recurring impairments of current and non-current assets at Gucci in conjunction with the ongoing transition. Net financial expenses, EUR 249 million, up EUR 52 million compared to 2014. This change is due to two things that go in two different directions. First of all, net cost of debt went down by EUR 22 million. Overall amount of debt grew. Financing rate went down substantially by 140 BPS thanks to dynamic and management of our debt. Secondly, currency and hedging effects, up EUR 74 million. The context is monetary volatility, which you're familiar with.
All in all, net income group share reaching EUR 696 million, which is up almost 32%. Net income group share of continued operations excluding non-recurring items above EUR 1 billion, though down, mainly due to financial expenses as well as current tax expenses. Let's analyze operational cash flow. I alluded to this briefly at the very beginning of my talk. EUR 616 million operational cash flow of the group was down EUR 418 million compared to 2014. Clearly, it's felt a strong impact due to cash out because of ForEx hedging contribution here is EUR 349 million negative. 2014 cash flow had seen a positive by a non-recurring element, which is a sale of a real estate asset, whereas in 2015, there were also non-recurring items that were done, such as work carried out in buildings we own or lease. Net changes in taxation, minus EUR 240 million from one fiscal period to another.
Lastly, the group in 2015 paid the first installment of the early termination payment of EUR 90 million to Safilo due to the termination or insourcing of the Gucci eyewear license. Luxury brands improved cash flow all in all by better control of WCR as well as better control of capital expenditure. Overall investments envelope in brands has changed mainly due to currency effects. Performance of the period is not sufficient, hit by cash flow generation below our expectations in the first half. Second-half performance is very good, especially since in 2016, currency hedging impacts and real estate investments should be significantly lower.
I'll continue now with a few comments relating to net financial debt of the group at the end of December 2015. Net debt stands at EUR 4.7 billion. That's 2.3 times EBITDA. The increase of the order of EUR 300 million this year results in half for conversion effects for debt in currencies other than EUR, for half the variance between operating cash flow on the one hand, and the payment of dividends, interest on debt, and financial investments on the other. This level of debt in no way undermines the financial solidity of the group, our goal is to gradually bring our debt within a range of one to two times group EBITDA. As I've just said, the group's financial structure is solid, with a level of equity related to the balance sheet and gearing that remain unchanged almost since 2014, respectively at 49% or 41%.
You'll note that Kering has available cash of the order of EUR 1.1 billion regarding the debt over and above the comments pertaining to its net amount. We worked in 2015 to extending its average maturity whilst reducing its cost. This healthy and dynamic debt management is also the reflection of the group's good access to diversified mode of funding, the quality of Kering's signature. I'll end by discussing the dividend. For 2015, the board that met yesterday will propose to the AGM on the 29th of April the payment of a dividend of EUR 4 per share, unchanged as compared to last year. As you know, we're attached to maintaining, over time, balanced payout ratios, both in respect of the recurring income of the group as well as available cash flow.
I won't return to the level of cash flow of 2015 and the payout ratio that results from a EUR 4 dividend. It's because we're confident in our model and our ability to develop and create value for our brands that we're giving this payout ratio for 2015. Let me remind you that an interim dividend of EUR 1.50 was paid on the 25th of January of this year, subject to the approval of the AGM. The balance of EUR 2.50 will be up for payment on the sixth of May 2016. Thank you for your attention, I'd like to hand over François-Henri to tell you where we're at in implementing the group strategy and to review the group's outlook.
Merci, Jean-Marc.
Thank you, Jean-Marc. I'd now like to return to the fundamentals of our strategy, Jean-François will set out how we've implemented it during this pivotal year. As I indicated earlier, a new phase in our history has begun. We've created one of the leading groups in the world of luxury and sport based on creativity and innovation, serving sustainable development. Our goal is to continue to expand our group, but more on growth than the return on capital employed, that its performance will be judged, we want it to be one of the best in class. Our strategy is based on four focus areas. The first, it's the fruit of the decision that I took at the origin of the group's transformation, is to build on several companies and not just on one. Indeed, luxury is not a uniform market.
It's made up of diverse segments that can only be covered with a complementary portfolio of brands. We patiently build a harmonious ensemble of brands, our companies enjoy their own expertise and cover various categories of clienteles and complementary. They've all reached varied stages of maturity, their growth profiles also differ. Together, benefiting from the collective power of the group and its brands, our companies grow faster and more strongly than they could alone. Let's now turn to organic growth. This is our second strategic focus area. We're positioned in business, which over and above the short-term uncertainties, grow faster than the global economy. Our companies have in common a powerful creative content. That's the source of their desirability. Luxury is a global business, thanks to our network of stores, we can reach our customers throughout the world.
This network, as I mentioned earlier, has now been formed for our leading brands, it's our priority to further boost its productivity. Early on, I insisted that we should focus particularly on our digital presence in order to bolster our brand equity to offer our services and products as part of a genuine omni-channel strategy. Digital is a powerful tool to convey our image, but also a loyalty-building tool, which is key for organic growth, organic growth that must be healthy and sustainable. The third strategic focus area is value creation at group level. This value creation must increase, must be bolstered through the organizations and working methods that we've put in place. It's a continuous process that will play a key role in a more constrained growth environment.
Thereby, we create the necessary conditions to continuously improve our profitability, to improve our return on capital employed, and thereby our free cash flow generation. Lastly, at Kering, the way we act is as important as the objectives we pursue. That's why our fourth focus area, sustainable development, underpins all our actions. On the social front, our priority rests on gender equality as well as the fight against violence against women. We must deploy our creativity, bolstering our environmental responsibility in order to minimize the impact to our activities in terms of supply, in terms of production and logistics. Our environmental P&L that, in fact, we share with others, confers upon us recognized leadership in a world where an increasing number of customers, and for that matter, an increased number of investors are concerned about the environmental fallout of their decisions.
Our commitment contributes both to our performance as well as to our image. Five years ago, we set a series of social and environmental objectives that allowed us to grow and create a momentum within the group. This year, we will present the review of these objectives, and above all, at the end of the year, we'll set out our strategy and ambitions for the period 2016-2025. I'd now like to return in greater detail to our two main focus areas. It's the brand portfolio and organic growth. After that, Jean-François will give you an update on Gucci and return to the importance of value creation within the group. The multi-brand model to begin with. We've built a group of companies with complementary profiles in couture and leatherware.
Gucci is obviously the flagship brand, and Jean-François will set out in detail the initiatives that we're putting in place and that have already restored to Gucci its status as fashion authority. Allow this company that already represents EUR 4 billion to continue to roll out. Gucci will remain the flagship of our luxury segment, and we're working to put it back on a steady growth pathway, ultimately. Of course, as our other brands continue to grow, the relative contribution of Gucci within our luxury activities will thereby be rebalanced. In order to undertake this, we have three brands that have topped or will top the EUR 1 billion mark short or medium term: Bottega Veneta, Saint Laurent, and Balenciaga. Their sales and profitabilities are set to grow, whilst of course preserving their exclusivity and identity.
As Jean-Marc indicated, the positioning of Bottega Veneta, that's doubled in size over the past four years, and this comes as no surprise, was more exposed than our other brands to the challenges of 2015. Let me tell you that I have absolute confidence in its future growth. Last week with Tomas Maier, Artistic Director at Bottega, with Carlo Beretta, the CEO of the company, we worked in detail all the elements of the brand strategy, and we have a precise vision of the next steps that will allow us to top the EUR 2 billion mark. We also have an important reservoir with companies whose individual size varies, but that will all contribute to the future growth of our sales and profits at Kering.
In order to accelerate the growth, we've strengthened the management of our couture and leather goods segment, in particular last year with the arrival of Grita Loebsack, who's with us this morning, heading up all our emerging brands. Our couture and leather goods brands cover a full range of the luxury segment, going for the most exclusive positioning, such as Bottega Veneta, Brioni, for example, that represent Italian craftsmanship at its finest, and more ready-to-wear, fashion-focused brands such as Stella McCartney or Alexander McQueen. In watches and jewelry, our brand portfolio, amongst the most prestigious, allows us to benefit from the important reservoir of growth that this category represents. In particular, also, in high-end brand watchmaking. These are strategic categories of individual luxury whose contribution will be assessed over time. We must, of course, penetrate regions where these companies have a low presence.
Furthermore, an important integration effort of our watchmaking brands at group and global level is underway. Lastly, Sport & Lifestyle division, which comprises a mainstream brand, Puma, and a specialist brand, Volcom. Well, these two brands capture younger customers, and it'll be in emerging markets, and the gradual ramp-up of 2015 of Puma confirms the turnaround of this brand. Our scope remains unchanged. It is since 2014, if we exclude the exit of Sergio Rossi that happened last year. With this move to a new stage, we plan more than ever to focus on organic growth in a changing macroeconomic environment. What are our priorities to continue to grow faster and outperform the market in what some call today the new normal?
In 2015, I worked with all the teams of the group, both on the ground and in the cross-cutting functions, to evolve our strategies and the way I operate to optimize our future performance and adapt to this new equation. We've left no stone unturned. At Kering, everything can and must be challenged. In order to make them even more distinctive, we've bolstered the positioning of each of our brands, and we've committed to ensure absolute consistency between all the touchpoints with our customers, be it the offerings of stores or advertising strategies, in order to ensure there's consistency, but also to offer a clear and truly segmented offer to simplify organizations and improve results. We'll refocus the offerings of certain of our brands in order to highlight the finest items.
At Boucheron, we've decided to focus on high-end jewelry, but also more iconic collections, Quatre, Serpent Bohème or Animaux de Collection. We also consolidated our central organizations in Paris, New York, and Hong Kong in order to strengthen and leverage group synergies. Lastly, we've continued and will continue to adapt our store networks, such as our indirect distribution. We've improved still further management and tools to supervise all our stores. And today, with more reliable and faster information, we're better placed to increase still further the productivity of our network. As you see, we're ready to address all the challenges, whatever the environment in which we operate. Our organic growth is first and foremost a function of the alignment of the DNA of our brands on the one hand, and our customer expectations on the other.
A passion of the fine product created with boldness, without hesitating to take creative risks, fully respecting, of course, the heritage of each company, the quality of each product, its strength of innovation, and the way it fits within a collection. Therein resides the equity of our brand, and our duty at Kering is to make that grow. For this, we do it through the choice of creative directors and their team. The immediate impact, in particular, that Alessandro Michele had on Gucci's image and its collections is, in this respect, very compelling. The arrival of Demna Gvasalia, here again, will give Balenciaga renewed impetus in ready-to-wear, which is a key category for the appeal of this brand. We also grow our brand equity through the choice of the management teams that daily manage each of our companies.
In this respect, at the head of several of our brands was renewed in 2015. I'd mention the arrival at Boucheron of Hélène Poulit-Duquesne or at Pomellato, Sabina Belli, two world-leading recognized experts that will provide renewed impetus to these fine jewelry brands. We must offer all our customers services and an experience that is exceptional. Their quality must be flawless, on a par with our products and brands. This goes via our stores, but also our digital presence, our advertising strategies that must be original, targeted, and consistent. Our network of stores throughout the world represents an outstanding growth driver. Improved sales productivity is an absolute priority for our leading brands. As I said before, expansion is behind us and our stores conceal a huge potential for improvement, and we're doing everything we can to develop this.
We've honed the data analytics for the performance of all our stores, which allows us to allocate investments location by location. Recently, we created a cross-cutting team in the field of retail excellence. It's a team that works with all the brands and implements individualized programs and, of course, benefits from our combined experience, group experience in terms of recruitment and training of sales teams. On the basis of all this, we're taking the necessary decisions. When, for example, we identify locations whose profitability is below par, we've already decided to shut down some stores in China and Hong Kong at Bottega Veneta, but also Gucci and all this aimed at strengthening still further the exclusivity of our brands. We will do the same when it becomes necessary to adapt the networks to changes in our markets wherever they are.
As regards wholesale, we're undertaking major and continuous effort to ensure true consistency between our stores and those of our partners. Look, for example, at what's happening at Bergdorf Goodman. I was there a few days ago, and if you go there, you will see the atmosphere in which Gucci is showcased at Bergdorf that is fully aligned with the atmosphere in our new stores. Midway between wholesale and retail, we've also undertaken to better develop the travel retail channel where the presence at group level is low, both in city centers and in all airports. For this channel, we've also put in place a dedicated transversal team for sales in this network.
In conclusion, I'd like to focus on the strategic importance that we ascribe to our digital presence for all our brands, both for the dissemination and expansion of their image as a channel for offering products and services. In this respect, Gucci, in the luxury universe, one of the first brands to develop a digital showcase for its brand and its products. In 2015, when the new site was launched, the online U.S. store of Gucci was ranked second in all the brands. The online strategies of our luxury brands are tailored to their profile and their own needs. Of course, the sites of our watches and jewelry brands are more focused on developing their image, their visibility than on e-commerce. Conversely, a brand such as Stella McCartney already achieves 15% of its global retail revenue through its online sales site.
In total, in 2015, group online sales increased by an additional 20% on a like-for-like basis. We will continue our digital expansion. We're proud of the road traveled in this respect. We plan to continue our investments so that our brands remain at the cutting edge of their respective sectors in the digital sector. I'm now going to hand over to Jean-François, who will present the transformation underway at Gucci, as well as value creation at group level. Thank you. Merci, François. Thank you, François-Henri. Good morning to you all
As François-Henri has said, creativity, enthusiasm, and confidence are really what drive us forward in the entire group. A great illustration of this is Gucci's rejuvenation. Last year, several times, we presented to you the Gucci action plans. Today, I can confirm to you that the renewal is very much moving ahead and all the lights are green lights. Throughout 2015, we've been working with Gucci's teams on the three priorities listed on the screen. Our objective was to reinvent the group's flagship brand to ensure its ongoing success, really making the best use of its heritage, all the while rejuvenating it, giving it new energy. Our number 1 priority with Marco and Alessandro was to further improve Gucci's offering and radically change the value proposal. We are determined to give a boosted identity to the brand and high-impact product offering.
To date, the process of change is very much a success. It's clearer in shoes and ready-to-wear. These are categories where there's a greater proportion of novelties. Gradually, we're broadening this renewal to leather goods as well as other product categories. We're also going to revamp somewhat the permanent collections. Which is to say we've made spectacular progress in repositioning product offering. Our stores are displaying new iconic products which really honor the heritage of Gucci. Here I'm thinking of the Dionysus bag or the Princetown loafer, which are a radically new vision of a classic, the Gucci loafer. These models have immediately become must-haves and became very important in the fashion world as from the very first day of their appearance. We mustn't forget, these models also yield excellent results. At the same time, we've worked hard to create in-depth transformation of how people perceive the brand.
We're doing this by communicating consistently the innovative, energetic vision that Alessandro has for Gucci. This new identity is exemplified clearly through traditional media as well as social media, reaching a younger customer base, which previously hadn't necessarily been exposed to the brand. Feedback has confirmed that Gucci's desirability has increased substantially. Now, of course, to create desirability, it takes time and you've got to be steadfast. In terms of reinventing Gucci, I can tell you that we're basically midway there. In 2016, you'll be seeing surprising initiatives that we will be announcing as the time comes closer. One of them has already been announced, holding Alessandro's Cruise collection fashion show in a mythical location, the Cloister of Westminster Abbey in London. With no exception, all points of contact with customers are a reflection of the ongoing transformation.
All of our customers in the stores and on the websites have to have a uniform, faultless quality customer experience. We began refurbishment of the stores network. The new concept's been rolled out. It was immediately successful in many of Gucci's locations that are the most iconic, such as Montenapoleone in Milan, Harrods in London. We'll continue optimizing the wholly owned stores in the Gucci network. There'll be openings and closings this year, basically a balance of both this year, openings and closings. Last October, Gucci's new website was opened in North America, which provides our customers with a better improved online experience. We began a program of retail excellence, which François-Henri mentioned to you, to make the in-store experience even more unique. Very quickly, we completely changed our product's packaging so that all the packaging really expresses the new impetus of this brand.
Now I'd like to share with you some specific information regarding Gucci's renewal. We've refocused the brand's offering on a smaller number of products that are high identity. The number of SKUs has been reduced by 60% in carryovers as Alessandro's collections arrived in the stores. We also reduced the number of new products compared to the previous seasons to further strengthen the impact of each new item. As you know, the more seasonal categories include a substantial proportion of novelties during each collection. The other way around, it takes longer for the number of novelties to increase in other product categories, such as leather goods, where carryovers play a very important role. All in all, just a little more than 30% of Q4 sales are Alessandro's creations.
In the first quarter of 2016, with the arrival of spring/summer men's and women's collections in the stores, as well as additional Cruise collection deliveries, that should make up just over half of quarterly sales. By the end of the year, all sales, except for some of the iconic leather goods lines, all other ones should be from Alessandro's collections. Creative transformation is very much underway at Gucci, and that has very clearly led to positive reactions from customers. We're specifically seeing a return of local customers to our stores. Something that's particularly promising is that the new Gucci customer is younger, regardless of product category. That's clearly where we'd set our sights on when we began brand renewal, particularly women's ready-to-wear and the 2016 Cruise collection. Broken down by nationality, we see figures are growing across the board, especially positive performance among Chinese and Middle Eastern customers.
We still have a fairly small number of stores that moved to the new concept, and the transformation is relatively recent, so it is not easy to really draw any specific conclusions at this stage. However, what is very clear is the initial results are highly encouraging. After its reopening throughout the third quarter, the first new concept store, the one in Milan, clearly outperformed regional trends overall, both in terms of store traffic as well as actual sales. In 2015, we adapted 34 stores to Alessandro Michele's new concept, including some of the most high-impact locations. This is a long-term endeavor. By the end of 2016, we should have remodeled 60 additional stores. Everywhere where they've experienced the new concept, customers have been enthusiastic. They really love the aesthetics, the showcasing of the products, impression of more space, the overall energy, atmosphere, and so forth.
During the first half, we are going to step up the rollout of our retail excellence program, particularly salespeople training and a clienteling strategy. You heard us, we are absolutely determined to substantially improve store productivity. The new North American brand website really provides with the perfect continuity of online and offline customer experience. We are highly satisfied with first few months results, which have demonstrated substantial increase in traffic as well as conversion rates. Tablets and smartphones now make up around 70% of traffic. Since the launch, number of pages visited has more than doubled, just as amount of time spent on the site has doubled. Average order placed has increased by 20%. The new gucci.com will be available in Europe and in Pacific Asia this year. As you know, for several years now, Gucci has been at the very top of the industry in terms of social media.
We have further boosted customer interaction and interaction with influence opinion leaders. Gucci has 15 million Facebook fans and over 7 million Instagram followers. Throughout 2016, we will continue to further strengthen the relationship between the brand and its customers by having a more sophisticated offering, optimizing our stores network, and making our clienteling tools even more sophisticated. This means that Gucci sales productivity should become top of the class in the next few years once again. As you will have observed, Gucci's potential for growth is enormous. Our teams have done amazing work in a short amount of time. In barely a year's time, they built sound foundations upon which the growth can achieve sustainable, profitable organic growth in future years. After this update on Gucci, by way of conclusion, I would like to come back to our third strategic focus, group-wide value creation. Value creation is the leitmotif.
It guides us in everything we do. On this slide, we are showing our main initiatives in the three areas of action. I will not dwell on operations too much since François-Henri talked to you a great deal about the main actions and principles here. I would just talk to you a little bit about how we set prices by region. There is strong currency volatility that has changed the balance of our price ranges, as it has encouraged customers, especially Chinese customers, but also U.S. customers, to make their purchases outside of their local markets. Due to this phenomenon, we have reacted quickly but cautiously. This is a sensitive issue, particularly since the Internet makes pricing highly transparent. Rather than having one systematic approach, which could dissuade some local customers, we make small adjustments adapting to specific situations for each brand and in each country.
We selectively adjust the prices of some products in certain markets, and we use the opportunity of new collections to do some small adjustments. Especially, we have an absolute imperative which is a significant improvement in our profitability. We are not satisfied with the level of our margins in 2015, although some of this is due to currency fluctuations. Increase in our store productivity, increased efficiency of our supply chain, systematic optimization of our gross margin, simplification of our organizations, and stricter management of operational expenses will help improve our margins as from 2016. We'll have to also selectively reinvest in some of our brands to strengthen their potential for growth in their various capacities. Return on capital employed at Kering is also a priority. We work relentlessly to improve it in all of our business areas. We're focusing on inventory reduction and quicker inventory rotation.
We're developing more fine-tuned tools to analyze our store needs. We're reconfiguring the supply chain, making it possible to improve responsiveness and adjust our order flows and reorder flows, thereby improving sell-through. We also have action plans to optimize other elements in working capital requirements. We're doing the same thing regarding capital expenditure, which we look at in a comprehensive fashion, not brand by brand. That way, we can carefully allocate our investments to the most promising projects and distribute them over time. We also use our collective experience to cut costs of establishing stores. This means doing a better job of negotiating or renegotiating leases. It also means comparing notes, exchanging best practices between brands and regions. For instance, at Saint Laurent, we've set up a project to cut by approximately 10% the costs of opening stores.
Lastly, as you'll have seen, over recent years, we've done some exceptional real estate operations. There will not be further such real estate operations in future years. As François-Henri said, we do not plan on making any major acquisitions in 2016. We're satisfied with the composition of our portfolio. We'll be moving on any and all opportunities for organic growth as they arise. We should significantly improve our free cash flow thanks to the measures I've outlined for you as from next year, as from 2016. Regarding using our cash flow generation, our priorities remain unchanged. Firstly, paying an attractive dividend. No change this year. That's a sign of our confidence in our improved profits and cash flow generation. Secondly, gradual debt reduction to once again have a financial structure that's more in line with our objectives. Our strategy and our initiatives for 2016 are therefore crystal clear.
We do have our work cut out for us, and we are certainly prepared to do it. We're determined and enthusiastic. Thank you very much for your attention. Before we move to the Q&A sessions, I'd like to share with you a few words of conclusion. Firstly, the strategies that you've described rest on daily experience of all our markets and in our environment, of course. Entering this new phase of our expansion has also led us to a more constrained environment to better focus on the companies and brands. The organizations put in place these past few years are primarily aimed at maximizing our efficiency to improve still further customer experience. All these initiatives allow us to address this new phase in a position of strength and to bolster still further our value creation trajectory.
I'd also like to take this opportunity to thank here all the employees of the group who were able to anticipate this transformation underway in all our businesses and have redoubled in commitment and creativity. It's on this message of confidence that I'd like to wrap up all our presentations, and we can now move to Q&A. Thank you.
Jean-Marc.
[Foreign language]. Yes, from SocGen. I have three questions, if I may. First of all, you've mentioned cost containment. What do you anticipate in terms of OpEx inflation at constant exchange rate in 2016? You've talked about redeploying Bottega Veneta. Will there be specific costs to be factored in in our margin estimates 2016? When do you anticipate returning to constant high single-digit growth with a view to the EUR 2 billion revenue mark, as you indicated today? Is there a new timeline for this objective? Thirdly, there was a negative ForEx impact last year from the currency hedges. Could you tell us what they are in terms of margin drops in Gucci and Bottega Veneta, because they should disappear this year? Thanks. Well, as regards
The operating models for our brands. We've built programs on the two halves in order to anticipate organizational changes, in order to optimize the structure so that the margin improvement remains the number one objective for our brands in both halves of the year. Turning to Bottega, as I indicated, we're now on an objective of EUR 2 billion. It's a very concrete target, built both on the potential that we see short, midterm, I'm not talking 10 years hence. To be clear, I'm not going to set a date. The potential of the categories that we're currently developing, you need to know, for example, even if the categories that are pretty modest today, third footwear, for example, ready-to-wear experience, relatively significant growth rates last year. We're building on that, putting in place the conditions to expand this category, notably store size. We also have a buy market approach.
Bottega Veneta, as you've seen, suffered in 2016 because of the structure of its geography. We knew that, nothing new, but has heightened importance of the other brands of Chinese customers that in China, Hong Kong weighs more than the U.S. or Italy at Bottega Veneta. We know that. A decrease in these markets has a higher impact. Where they were of accelerating its environment, that is redeploying and rebalancing Bottega Veneta activity between developing countries and more mature geographies. All these facts make us very confident as to the ability of the long-term horizon to top the EUR 2 billion marks that we're working on that. It's accompanied by work on advertising strategy. It suffers from a deficit in brand equity. We're going to build that and bolster it. That's what we're going to do to change a number of things at Bottega Veneta as of this year.
On currency impact, I won't return to the mechanics of conversions and hedges, currency translation hedges that you master, even if you can't fully model that. For the division, the dilution was 300, rather 250 basis points for Bottega Veneta and 310 basis points for Gucci. The impact of hedges and ForEx is the order of some 40% for the whole of the division, close to half for Gucci, and Bottega Veneta is about in the norm for the div, and that's the contribution of dilution linked to currency effects and hedges. No surprises, we discussed this. There was a negative operational leverage for that year.
If we look at 2016, I won't try and predict currency fluctuations, given the currency hedges we have at the present time, just to give you an illustration, at EUR 1.12, the dollar, these impacts are expected to be neutral or very slightly negative, but nothing like what we've had this year.
Guy from MainFirst. Three questions, please. With regards to Gucci and productivity, moving back to the top of the class, as you mentioned. If we think about the sales per square meter at Gucci, probably around EUR 20,000 per square meter at the moment. In order to get back to the top of the class, that could imply a doubling or so of your sales per square meter. Maybe you could give us some indication as to how you think that you can achieve that going forward. With regards to Bottega, you mentioned that there's a very high Asian consumer skew. We think it's around 80%. Maybe could you talk about, within the next three years, how will you balance the consumer weighting within Bottega, which is obviously very high for the Asian consumer today? Finally, on Puma.
Puma had a very good growth in 2015. In terms of your future projections on Puma's profitability, given its size and scale within the sporting goods industry, do you think EUR 400 million of EBIT is an achievable target by 2020? If it's not, why will you keep it in the group? Thank you.
Regarding sales density, we have implemented. To the sales density per square meter, Gucci and all the other brands for that matter, we've implemented a whole slew of programs and initiatives that go from merchandising, in-store merchandising, through the reallocation of surface area within the stores at comparable the surface area, but also concern sales force training, the retail action works in terms of selling ceremony, as we say in French, and also focuses the attention of all people in the store and the sales space. A significant part of our store managers, regional managers, spent in reporting administrative tasks. We're scrapping a large part of that work so that they spent more time on sales, coaching the sales force and teams on the ground.
The initial tests conducted, be it in the renewed stores or the non-renewed stores, are very promising, and that's why we're very confident in that ability, once again, across all our brands to improve our sales per square meters on comparable stores. Thank you. Bottega, as I indicated, Bottega, well, we can see the glass half full or half empty, but I see it half full. Bottega has significant potential, notably in rebalancing its sales structure in mature geographies. When I say that, of course, you need to understand that in mature countries, Bottega has a strong tourism component, so the potential that Bottega has in mature countries on local customers is major. When I look at penetration of Bottega on local customers, it wasn't an absolute priority because of the brand's momentum. We really have immediate potential to tap, both in the U.S. and Western Europe.
There's a footprint of Bottega in the U.S. We have a capability which is on the par of the size of the U.S. for Bottega. We have untapped potential there. Conversely, as I said earlier, we're adjusting our network to the Asian reality, notably in Hong Kong. There'll be a few closures in Hong Kong and in mainland China at Bottega. It's all these things that Bottega, and the makeup of its customer base, on the one hand, and geography, has immediate potential to tap, and we're working on that. Turning to Puma. Sports is a business. If we work well at a certain size, which is our ambition that we have for Puma, normative levels of profitability are between eight and 10%. If you do the maths the other way, what would 10% require to achieve the figure that you've mentioned in terms of size?
In terms of the Puma growth rates that we have at Q4, notably, it's not impossible. It's an ambition that we can set ourselves. That's really the priority to continue because all lights, all systems are green. We're very satisfied. We're very happy with the feedback that we receive, both in the visible portion sales of Puma, but also the reorg, the efficiency of the tools of the supply chain that have progressed hugely. There'll be a gradual and substantial improvement of performance of Puma. Let me just add on Puma. The cash flow level for 2015, cash flow is quite disappointing, and obviously, we need to bring it back to par this year.
Three questions, if I may. The first one is on the new store format on Gucci. You refurbished 34 stores in 2015, 60 are planned for 2016. I would like to know how many, if possible, in 2017. The 60 stores that you will refurbish this year, which % of the sales of retail of Gucci are? You mentioned also something very interesting, that the store in Milano, Montenapoleone, had a significant over-performance in comparison to the existing stores. Can you give us a number or a quantification of it? Would be highly appreciated. The second question is about the CapEx. You talk about CapEx on a group allocation. Can you give us an idea of what are the priorities of Kering in 2016 that will absorb the maximum of this CapEx? We can imagine the store network of Gucci.
You mentioned Balenciaga is an upcoming brand, anything of more clarity would be highly appreciated. Thank you.
Jean-François will come in if need be. Indeed, we have Okay. Okay, you're fluent in French. Indeed, we've renovated 34 stores, 60 next year. We need to move forward, not just a question of image. As you know, Jean-François, the performance of the new concept, exceptionally fine. Obviously, it's the quality of the collections, the appeal of the collections, but also the efficiency of the concept. We've done a big effort on in-store merchandising, and we see efficiency that's linked to the new store concept. Obviously, what's more, the cost for developing the stores was worked on at Gucci. This must go hand in hand with an acceleration of our renovations. Our objective isn't CapEx, because CapEx, we control them at group level. Jean-François and I give the authorizations or not, store by store, for each opening.
The overriding objective is really to improve free cash flow. As of this year, all the brands have that objective, CapEx is only a consequence of that. If free cash flow targets are met mid-year and at the end of the year, CapEx will follow. If the free cash flow targets are not met, we will slow. That's how we operate. At Gucci, the Delivered high free cash flow last year. Further improvements set while stepping up the number of renovations at 60. This is a combination of those two factors that's absolutely key for us. It also answers the CapEx allocation for the other brands. That's how we operate. I could add, from a more operational standpoint, we add, in terms of the region concerned by the openings, the performance of stores on a like-for-like basis.
A brand that doesn't have a like-for-like performance that is sufficient wouldn't get the authorizations for store openings in the region. That's one of the decision benchmarks that we apply to all the brands. Exane BNP. A question, first of all, on creativity. The results that you've shown today underscore the importance of creativity and innovation against a fiercer competitive backdrop if we look at the good performance of Gucci. As regards Saint Laurent, we had read a lot in the press about possible changes at the creative management of Saint Laurent. Do you have any comments on that? As regards Bottega, there's also a perception that there's a sense of déjà vu on certain products. I don't know if you have any comments to make about that. Second question on digital.
Seems clear that digital is becoming increasingly central and strategic for the expansion and growth of luxury distribution channels. Gucci, a leader in this segment. Are you fully satisfied with your cooperation with YOOX NET-A- PORTER for the other brands? Do you plan to maintain it for the midterm? You underscore the importance of return on capital employed. With that in mind, are you satisfied with the growth in Kering Eyewear business? Do you feel that that business is sufficiently profitable? Thank you. Thank you, Luca. Well, obviously, you know the answer to the first question. We don't comment on rumors, so I'm not going to break that rule this morning. Second question of interesting that you frequently go to Bottega stores, Luca. Indeed, the impression that you have is very real. It's linked actually to the fact that Bottega has an issue of store size.
Bottega has developed a number of small-sized stores, so the priority is to expose the carryovers, the iconic products. Doesn't leave enough space for new products. Last year, we had positive growth rates on new products. New products, well, the issue that we have is that we're not sufficiently equipped in-store to expose as we should. The impression is linked to this one-off, the imbalance between carryover and seasonal new products. Bottega has this very specific positioning in leather. It's the most creative brand, far and away, where the weight of seasonal products weighs the most, and it's really a key component of the positioning of the brand. We're working on this actively, and in the work I did in New York last week with Carlos and Tomas, we worked actively on that. Turning to digital. As I said, we have a strategic priority on digital.
We started a number of years ago. Gucci, through its lead and size, is fully integrated, of course, and as you know, as part of a JV that we control to team up with a technical and logistic partner, YOOX, to develop faster, swiftly, and more uniformly at group level the other brands. It was done. We're satisfied with the job done. The brands have all grown. Growth rates last year, very good. This JV called Elite is delivering good results. There mustn't be any confusion. We control it. It's a subsidiary of Kering, and what's more, transparent. All the choice of products, marketing, merchandising, pricing is fully done by the brands. On eyewear. On the profitability of capital employed, especially on Kering Eyewear's impact on that, it's clear that in 2015, even 2016, the profitability of capital employed is penalized by Kering Eyewear. We're in the launch phase.
We have ramp-up costs. We're constituting the WCR. The amortizations is to come. We're building the accounts. It's essentially a wholesale business. In 2016, it will weigh slightly on cash flow. As of 2016, and especially for the next years, with the incorporation of Gucci, we have profitability and return on capital employed that'll be very good. Maybe just to add that we're ahead of our plan for Kering Eyewear and more sales than anticipated in Q4 with existing licenses.
Hi, good morning, Helen Brand from UBS. Three questions from me, all on Gucci. The first one, just in Q4 with the 6% retail growth for Gucci, can you talk to the performance of the new collections versus the old collections and the level of markdowns on the old collections in the quarter compared to last year? Secondly, can you just talk to the wholesale order book for H1 for Gucci? Obviously, you got an easy comparison base on the wholesale channel coming up. Specifically, also what trends you've seen around Chinese New Year and recent trading. Finally, just the EUR 192 million of impairment at Gucci in the non-recurring costs. Can you elaborate a little bit more on what this relates to specifically?
To talk to you about the new collections first, yes, there's been a substantial improvement in the last quarter of the year at Gucci, without giving you specific figures. Just, let's say, new collections, as Jean-François said, or Jean-Marc said, were 30% of activity. This is ramping up. It will reach 50% in Q1, reaching 100% for end of year 2016. As of now, the new collections, whether they're handbags, ready-to-wear or so forth, are seeing double-digit growth. Substantial. Again, though, a subset of stores, we've selected the biggest stores, like the one in Milan. You can't necessarily extrapolate or have to be a little bit more cautious, but it's going very well. Now, markdowns, reductions, Q2 last year, yes, during the transition of collections, change of designer, we had to sell off the previous collections, so substantial markdowns.
The last quarter, markdowns were very much in line with what we do conventionally at Gucci. What happened in Q2 wasn't reproduced. No disproportionate markdowns in Q4. I'd also add a point, an important thing for us. We didn't actually sell at a discount the first collections, particularly ready-to-wear by Michele in Q4. Regarding the Chinese New Year, it's complicated because it's shifted this year, end of the month. We could tell you more about this at the end of first quarter. We will only know by the end of the month what February really looks like. I can't really give information on Chinese New Year yet. Yes, just to build on something regarding sales and markdowns. Full price sales are up in Q4 at Gucci. That's mainly sales of the new collections.
Regarding order books, Helen, you know that we don't give specific figures, but we can at least say what the trends are. I repeat a point. Q4 is growing. Wholesale at Gucci is growing up 4% in Q4. Throughout the year, there was streamlining of the network. That's now completed. No major changes to be expected, which means Q4. We also saw the effects due to the arrival of new partners, Dover Street Market, Colette, and so forth. Very sophisticated retailers, high-end fashion. We read that fashionistas love Gucci. Well, we're talking about the customers and the retailers themselves. In Q4, we saw order books that are looking good, seeming to very much head in the right direction at the beginning of the year. Let me comment just briefly on non-recurring costs. It's especially in the first half, there was a significant impairment.
I can remember very well the question by Mélanie on that during the press release for the first half. Mainly having to do with stocks, large-scale depreciation of previous collections that were in inventory. In the second half, it's not the inventory that depreciated. François-Henri talked about restructurings, reorganizations at Gucci. There were some departures and some simplifications of structure that led to restructure. In addition, you also heard François-Henri talk about the momentum, the change in the distribution and retail network and store network, which has led to certain write-offs of assets in our stores that will be closed or have been closed. Good morning. Céline Cherubin, Natixis. I'm over here. Hello. I've got three questions, if you don't mind. Firstly, on the relaunch plans for Gucci and Bottega. They were very ambitious in 2016 as well.
Could you give us an idea as to their impact, possibly, on operating margin? Over 50 stores are to be refurbished this year. Will we still be talking about an order of magnitude that you already booked in 2015? Question 2, one of your strategic focus is to improve ROCE without, of course, giving us specifics. As to your target, could we at least get an idea of the pace of growth on an annual basis that you're targeting in the next few years? The last point, Yves Saint Laurent, growth of the brand is very telling, has been for several years, half years, and they'll go beyond EUR 1 billion in revenues in 2016, an important step. What's the continued rollout plan going to be for YSL? Thank you.
Regarding the store refurbishments at Gucci and Bottega, as we've said, at the same time, we've set up programs designed to cut the cost of new store establishment and also to cut the amount of time the stores take to refurbish. We've made substantial progress here. The result is the 2016 projects in the pipeline will not significantly have a negative effect on growth in operating margin. Regarding return on capital employed, this is something that's going to entail short-term and medium-term effects. We've clearly planned the progress we intend to make, as François-Henri has said. For several years now, we've had in place manager compensation mechanisms that we've slightly changed this year. We've increased the portion of the bonus, which is now based on cash flow, going to 50%, the remaining 50% based on profits.
Furthermore, the long-term compensation mechanism is also based on a value creation mechanism, which of course also includes return on capital employed. On the Saint Laurent question, yes, Saint Laurent in the neighborhood of EUR 1 billion will certainly go beyond the EUR 1 billion mark this year. To assess the potential for Saint Laurent, remember, they've got 142 stores, around EUR 1 billion. Think of other French brands that one might compare to Saint Laurent. This gives you an idea of the potential for Saint Laurent. So EUR 1 billion is well below total potential here. Of course, we'll be talking about very balanced rollout, very careful rollout, as has been the case for their network. As I said, Saint Laurent also has to adhere to our rule, i.e. extension of the network, but all the while, improvement in free cash flow every year. That's the main objective.
It's been the case at Saint Laurent, and it's happened on a very regular basis. Also, in terms of store efficiency, there's tremendous potential for further improvement. We're talking both about existing stores, where we can seek out further growth, and we're doing that. In addition, we're talking about extending the network, and the company has major potential here. As you've seen, there'll also be improvement in its profitability. As I know you know, Saint Laurent has a major cosmetics license, which is also developing apace. This is all very virtuous, making it possible to have clear goals for the company. Hello from HSBC. Three questions. Firstly, Puma, if I might come back to that. 2007, when you acquired Puma, you gave us a very optimistic outlook for the sports market generally, and now growth in the sports industry is greater than luxury, so you should be highly satisfied.
This is why we're hearing lots of rumors in the press about possible sale of that asset. Why wouldn't you want to quiet those rumors and say you're going to support the strategy plan that Puma's going to be submitting? I asked the question during the conference call yesterday at Puma, asking about their strategy plan. I was told there's a 3-year plan, there are rolling plans, and also a 2019 plan. Could you possibly allay any uncertainties there might be regarding that asset? Second question on Gucci. As I've understood from your CFO, impact will be stable as dilutive of currency in 2016. There should be some positive effects, though, especially since past hedging, some of it was internal. Could you specify that? How long do you think it'll take to come back to the 30% operating margin at Gucci, which is fairly symbolic?
On other brands, Q4 saw very good growth in revenue. On the other hand, margins below expectations. What's your explanation for that difference? Are there one or two brands that are having particular problems with their margins? To repeat, I won't comment on the rumors you allude to. That's true regarding any of the brands. As we say to you every year, and as we also do, most importantly, our priority is to support growth and especially Puma's turnaround, which is looking great. There'll be significant improvement in the company's performance this year. That's our number 1 priority with Bjørn. We're doing this with Jean-François, who's highly active together with Puma. Things are looking, as I've said, very good. On currency, Gucci. Antoine, yes. What I said.
Dilution to some degree is due to currency effects, necessarily, if it's a neutral effect next year, underlying your question, you're wondering, are we expecting an improvement in brand profitability? Yes. Of course, that's what we're expecting. Improvement in brand profitability, at least of the major main brands that were most impacted this year. Now you've also heard there are many action plans. These action plans, for instance, at Bottega, might lead to dilution of profitability. We mustn't waver from our objective. When we talk about return on capital employed, we have to realize that this is the highest one in the group, including with goodwill, and it hasn't significantly changed since 2015 compared to 2014. The priority will continue to be improvement in profitability, maybe not to recover all the points due to currency dilution.
Regarding Gucci, I hear this idea of this benchmark of 30%, there are investments to be made in the brand. We'll try to combine both an improvement in profitability, all the while make the requisite investments in the brand to make sure it keeps on its long-term course. I think you've also clearly heard François and Jean-François's messages. What we also keep an eye on is improvement in cash flow generation, improvement in return on capital employed, and 30% margin at Gucci remain a target, that's not necessarily the short-term objective, at least not for 2016 necessarily. To come back to the question on revenue growth versus changes in profitability, as we said, profitability dilution in the second half was lower, less substantial than in the first half. Which is to say, already, the work we've started on cost base have begun being beneficial.
That said, though, particularly for a brand such as Gucci, which has seen renewed growth, momentum growing at 0.4%. Gucci saw the overall momentum you're seeing in the whole of the industry. You've seen this in recent financial reports by hard luxury and fashion leather companies. There's been erosion in margins generally, often due to cost of stores. I talked to you about permanentizations due to store openings in the past. This is the main explanation for the dilutive effects. Remaining elements, we've really got costs pretty much controlled. Of course, I'm not hiding that the watches brands, watchmakers, due to Swiss franc trends and all the various market issues you're familiar with, of course, help to contribute to the dilution in margin for the other brands.
Hi, good morning. It's Chiara Battistini from Bank of America Merrill Lynch. I have three questions, if I may. Firstly, on Gucci, you talked about a pickup in the Asian consumer, I just wanted to confirm by how much global Chinese spend actually improved in Q4. Secondly, on Bottega Veneta, you talked about the opportunity to improve performance of the domestic clientele. Can you just talk a bit more about the initiative that you have to drive that? Finally, a question on M&A. I understand it's not a priority near term for you, I do want to know how you think about it longer term regarding the type of investment assets that you think would be most accretive for the group. Related to that, in what segments of the market do you think there needs to be more consolidation?
Turning to Gucci, indeed, in Q4, we saw an improvement, a significant upturn in Chinese consumers, notably in mainland China. We're back on a growth path. Once again, it's not just that customer segment of Gucci. We have very good trends in Q4 in Europe, the U.S., a significant uptick in the U.S. It's healthy both in terms of geography, nationality. The reversal of trends at Gucci is even very balanced. As to Bottega, the focus on domestic customers obviously are to use what we haven't done much thus far because growth and traffic were there. We have very substantial customer databases for local customers that we're beginning to tap very specifically store by store with target store by store.
Furthermore, in terms of product offering, the company that had this overweight of Asian customers, both in Asia but also in terms of tourist flows. Offering was the reflection of that. Working the offer to have products that are better suited to the tastes of local customers in the major markets, that's something in place that's set to improve as of this year, the categories, notably bags. On the third. On M&A, well, as you heard, there'll be no major acquisition move in 2016. As to the longer term, we are indeed always attentive to changing dynamics in the luxury sector and we're a major player in the luxury sector.
These are things that might possibly be considered. Portfolio is well-structured, well-balanced portfolio. As I said, we have so much organic growth potential in our brands that quite frankly, it's not a priority. We'll take one last question from Mélanie.
[Foreign language] Merci. Bonjour.
Thanks. Hi, JPMorgan. Three questions. The first on Gucci. Its turnaround in terms of sales, it was very impressive, notably Q3/4, there was quite a high-fashion content in the brand relaunch, which was a smart move, but what's the next step? Clearly, you've begun with the ready-to-wear and the best seller on the bags, Dionysus, that's very branded today, about EUR 2,000. Could you tell us a bit how you view prices trending, notably on bags and maybe the fashion content versus carryover to better understand the turnaround? Second question is more financial. On the Gucci margin in Q2, can we return to what exactly were the impacts of ForEx and other drivers? I understand that leases had an impact, right, but was mixed impact. What were the other drivers?
On Bottega lastly, 2016, 2017, where we've understood that you're going to reinvest part of the ForEx gains in the redeployment of that brand in the U.S. Can we expect very little margin expansion in 2016, 2017, possibly a dilution? Could you tell us a bit more about that? Thanks. Turnaround, okay, the absolute number one priority was to give a contemporaneous, modern, very attractive image of a brand, particularly for ready-to-wear, but not only. You mentioned Dionysus, which is the first bags range. Last year, it was launched only mid-year, became the second best-selling line at Gucci, which does show the importance of the image, the signature of the brand, and the way it's treated. Obviously, the brand won't have all its sales on fashion. The balance, permanent products, carryovers, and fashion will remain basically the same.
This year, the work that's already underway that will intensify is to revisit the permanent collections that today are older collections, and you'll see that this will be done. Today, it's an important point to ensure a consistency of offering and to have performance on the permanent lines that's greater, but there's no vision to kind of transform the balance of the brand between the categories, the fashion and permanent collections. There is this resolve, change the image across all the collections, including the permanent lines. Operating margin. The question's specific. I don't know if my answer will be equally specific. Dilution full year for Gucci is the order of 371 basis points. Q1, as we said, 50% of that dilution that was greater, 471 basis points linked to currency impact.
Q2 dilution is lower, 280 basis points, but the negative contribution of the hedge is lower of the order of 30%, so it means that we have 70% linked to de-leveraging. There's a point that wasn't sufficiently mentioned, is the impact of the geography mix. It's true that the amplification, the deterioration in Hong Kong, Macau, where, as you know, we have very profitable stores contribute. Furthermore, as you know, we also, over and above the cost of stores, we heightened advertising and marketing in the second half to support the introduction of the Cruise collection, which reached our main stores in September and across the network and distributors last October. That's what contributed that impacted on the margin for H2. Turning now to the question on Bottega, just briefly to say, but I'll let Jean-François come in on this.
In this particular instant on Bottega Veneta, we've always said the objective is to maintain high profitability and increase in exceptional income. In terms of absolute, we delivered that +5% this year. Impact on profitability of our initiatives, Jean-François?
Yeah.
Brands have built their budget on the basis of the constraints that we've set for them. That's to say, increase in sales with an improved profitability and cash flow. Bottega did not depart from that rule. They did that even if, as you anticipated, part of Bottega's growth will go hand in hand with heightened advertising because obviously the brand needs to boost its brand equity and therefore will increase its marketing and advertising spend within the framework we set for them, that is boost its margin and cash flow. Thank you. Thank you all for your attention. I'd like to close with a few words. I'd like to thank you for the very fruitful interaction that we have throughout the year, especially with Claire and her team.
We'll have occasion this year, not only at the quarterly updates, but during specific events that we'll be organizing to update you on the progress and execution of our various strategies, notably those presented this morning. You see, we're beginning this year in a complicated environment with optimism and confidence, thanks notably to the momentum that we have in-house on major brands such as Gucci, but also on Puma. We are determined, and I believe we'll be able to deliver quality results this year in spite of the environment. Thank you for your attention. Have a pleasant day.