Good day, ladies and gentlemen, and welcome to the 2014 first quarter sales conference. Today's conference is being recorded. At this time, I would like to turn the conference over to Jean-Marc Duplaix. Please go ahead, sir.
Good evening to all of you. I'm pleased to welcome you to this call and review with you our sales in the first quarter of 2014. I will provide you with a bit more background on sales at group level and in our major luxury and sports and lifestyle brands. Jean-François Palus, the Group Managing Director, and I will be available to answer any questions you may have on the quarter's top line. Slide four summarizes our sales in the quarter. Total group sales were up 4.1% on a comparable basis. In reported terms, sales were also up, dented by adverse currency movements, which, excluding the positive scope contribution, had an impact of four percentage points on group revenue growth and was notably important in sport and lifestyle.
In luxury, our focus on retail development as well as organic growth delivered solid results with a marked acceleration in retail in the quarter. All of our brands, including Gucci, contributed positively to the growth in retail numbers. Conversely, wholesale was down, I will comment on that shortly. In sport and lifestyle, trends were encouraging, with Puma sales virtually unchanged in the quarter, despite a market environment that remains tough for the footwear category in Western Europe. I will now move on to slide five, which gives you a snapshot of the quarter in luxury. As you can see, both on this slide and for all of the luxury brands, we are adding an extra layer of detail by providing retail changes by region and showing wholesale separately.
Given the growing strategic importance of our retail operations, which now account for 69% of our luxury division sales, this represents the best approach to let you assess the underlying performance of each brand. In addition, as wholesale covers different types of channels and accounts, it tends to be far more volatile and hard to interpret on a quarterly basis. As you can see on the chart, performances in the quarter were clearly lifted by solid growth in retail sales up 13%, a sharp acceleration compared to the trend witnessed in full year 2013, during which retail sales had grown 8%. This quarter has seen the best performance since Q4 2012, with improved retail dynamics across all brands, further illustrating the relevance of our action plans centered around brand elevation, retail excellence, and organic growth.
Growth was solid across all key regions, with double-digit retail sales increases in mature and emerging markets alike. Particularly notable was Japan, where retail sales grew close to 40%. This is a result of strong underlying sales in this country, partly boosted by anticipations of purchases ahead of the VAT increase on April 1st. In emerging markets, the acceleration in retail in Asia-Pacific, up 10% in the quarter, was encouraging with improved revenue trends in mainland China. As we had anticipated, wholesale revenues were down in the quarter, reflecting some phasing impacts, but mainly our deliberate choice to accelerate the shift toward own retail across all brands.
In line with our focus on organic growth and consolidating our existing retail network, the division had three net openings in the quarter, not including the five Gucci directly operated stores that were bought back in Russia in February and March. Before I turn to the individual luxury brands, I am sure you have seen today's press release announcing the creation of two divisions within our luxury activities. I want to make it clear that the presentation of our financial information in operating segments will remain unchanged. Let's now turn to Gucci's performance in the first quarter on slide six. Gucci enjoyed a positive revenue increase driven by solid growth in retail up 6%. Retail now accounts for 79% of Gucci's sales, up four percentage points compared to last year.
This reflects the strong retail revenue trends and a further reduction in wholesale revenue coming from discontinuation of some operations and buybacks in Italy, Korea, Canada, and Russia over the past quarters. By category, sales growth was again especially solid in handbags, up 12% in retail, with all regions achieving a positive outcome. No logo and leather styles once again posted solid increases, translating into another quarter of double-digit growth in average unit retail prices. I will now quickly comment on Gucci's retail trends by region. Japan posted booming sales propelled by the solid appreciation of the Gucci brand and especially of its core leather goods offering in what is the most sophisticated market in the world. The underlying strength of Gucci in Japan is particularly notable as it comes on top of a high single-digit increase in retail sales last year.
In Asia-Pacific, retail revenues were up 2% in the quarter. In mainland China, Gucci achieved a new quarter of improvement, while Singapore and Taiwan remained somewhat softer, in line with broader industry trends. North America, for its part, was resilient, with a 3% increase in retail sales despite the particularly adverse weather conditions, which clearly had a negative impact on the quarter's performance. In Western Europe, revenues were down slightly, combining continued soft spending from the local clienteles in Europe outside of the U.K., along with temporary pressure on tourist flows from Russia. In Q1, Gucci implemented additional steps in its brand elevation strategy, with a particular focus on initiatives aimed at driving retail excellence across regions. In Asia-Pacific, Gucci filled senior general management positions in Taiwan, Hong Kong, Korea, and Southeast Asia.
In mainland China, the management transition is still ongoing, but a number of key positions have been filled to oversee merchandising, retail, and HR, all based in Shanghai. As of March 31st, Gucci operated 475 stores, all one net opening in the quarter. Mainland China, the store count was unchanged at 61 units. Gucci also refurbished six stores around the world during the quarter. Moving on to slide seven, Bottega Veneta delivered a very solid start to the year, up nearly 15%, 15, comparable, underpinned by retail trends that were fully consistent with the previous quarters, up 18%, 18. All main product categories contributed to the quarter's growth. Leather goods posted further firm increases in sales, led by continued outstanding client reception for both the iconic Intrecciato style and for the more recent plain leather shapes and styles.
Footwear, as well as men's lines, enjoyed strong growth, men's now representing around 35% of sales. All in all, the solid and broad-based performance across most product categories confirmed the great appeal of all the recent novelties embedding key elements of Bottega Veneta's DNA. Sales remain sustained in retail across all main regions. Asia Pacific and China, in particular, enjoyed solid double-digit growth. Japan also recorded buoyant momentum on top of the very solid growth posted last year, further illustrating the desirability of the brand in a very well-penetrated market. In Western Europe, retail sales were roughly in line with the previous quarter. In North America, sales growth was more modest, reflecting the adverse weather conditions. During the quarter, Bottega Veneta opened five new directly operated stores, bringing the total store count to 226.
All the highlights I just mentioned in terms of sales trends, product categories, channel mix and selective store openings illustrate our strategy consistently implemented of nurturing the brand's exclusivity. On slide eight, you will find a recap of Saint Laurent's sales. In the first quarter, Saint Laurent posted a 27% increase in sales. This was driven by the 72% growth in retail, confirming the sharp acceleration of the brand across all regions. This very strong trend reflects the successful rollout of Saint Laurent's new store concept and the focus on directly operated distribution. Retail represented 62% of sales in the first quarter. Just a word on wholesale. The change is due to the very high comparison basis of 2013, when both Cruise and Spring/Summer collections deliveries had been concentrated in the first quarter.
By product category, sales this quarter were once again fueled by the outstanding performance in leather goods, driven both by new styles such as Sac de Jour on the Monogram line and by the redesigned carryover line, WIDE. Ready-to-wear for men and for women enjoyed solid momentum, thanks to the strength of the Spring/Summer 2014 collection. At the same time, clients reacted very positively to the all-new lines of shoes like Kitten and the Dance Ballerina. Revenues from the perfume and cosmetics license were the only weaker category, with a drop of 7%, a performance that is not aligned with the brand's appeal and dynamic. Saint Laurent achieved very strong sales in all markets, as you can see on the slide.
Retail sales were up more than 50%, five, zero, across all regions from Western Europe, which is the brand's main market, to Asia Pacific, where Saint Laurent's renewal is resonating strongly. As of March 31st, Saint Laurent had 119 directly operated stores, with four net openings during the quarter, of which two in mainland China. Moving on to slide nine, I will discuss our other Luxury brands, which altogether enjoyed revenue growth of 8%, driven by retail sales up 17%, one, seven. In line with the previous quarters, sales growth in fashion and ready-to-wear was led by U.K. designer brands as Stella McCartney and Alexander McQueen both enjoyed double-digit growth. At Balenciaga, the retail channel was also sustained, with shoes and ready-to-wear leading the way.
Brioni sales were up double digits in retail, but the overall performance of the brand was impacted in Western Europe by lower traffic, in particular from the Russian clientele. Trends in hard luxury, contrasted early in the year, finished the quarter more solidly. Boucheron notably enjoyed consistent double-digit growth driven by the retail channel. In watches, Girard-Perregaux started operating with a new partner in Greater China and generated very positive feedback at the Baselworld trade show on the presentation of its novelties. Altogether, in the other Luxury brands, we recorded two net store closings in the quarter, bringing the total net worth to 337 units. Moving on to slide 10, let's have a look at Sports & Lifestyle, where revenues were broadly stable at Puma at -0.4% and up 1.5% at the other brands.
As is the case for its peers, FX impacted Puma's revenues, which, in reported terms, were down 6.6%, especially due to fluctuation of some emerging market currencies, notably in Latin America, Turkey, India, and Russia. The trends in the first quarter were quite encouraging, with both retail and wholesale close to flat. Moreover, sales growth in our mainline stores was positive on a like-for-like basis. By product category, the overall picture was consistent with prior quarters. Accessories and apparel continued to drive revenue up 10% and 3% respectively, almost fully offsetting softer footwear sales. There are, however, encouraging signs to point out in the footwear category. In particular, the new evoPOWER football boot and the refresh of the Faas product line in running. Puma is starting to gain traction with its retail partners, thanks to better sell-through for specific products.
Due to the revamped product offering and the upcoming new brand campaign, Forever Faster, order books for the fall/winter season are improving slightly. Another illustration of Puma's action plan to improve quality of revenue and distribution is the Puma Lab at Foot Locker initiative. More than 100 of these innovative shopping areas have been successfully opened in the U.S. in the first quarter. By region, sales were mixed with good performances in Eastern Europe and the Middle East, as well as in North America, where they were driven by apparel and accessories. At Volcom, retail performed well while wholesale revenues were more contrasted. The recent refocusing of Electric in terms of product offer and the launch of new categories is delivering strong results. A few words of conclusion. In luxury, the strong retail performance of all our brands clearly validates our push towards controlled distribution.
Bottega Veneta and Saint Laurent are continuing to deliver outstanding sales growth while Gucci pursues its brand elevation. This is the best strategy to nurture the long-term potential of the brand, and we are confident in the action plans currently being implemented. In sport and lifestyle, our performance is in line with the roadmap we have discussed at the beginning of the year. We are encouraged by the reception for Puma's new products and by the improving image of the brand we are already witnessing with our key distribution partners. Thank you. Jean-François and I are now available to answer your questions.
Thank you. If you would like to ask a question at this time, please press the star or asterisk key followed by the digit one on your telephone. Please ensure the mute function on your telephone is switched off to allow the signal to reach our equipment. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question. We will take an opening question from Thomas Chauvet of Citigroup. Please go ahead. Your line is open.
Good evening, Jean-François, Jean-Marc. Two questions, please, on Gucci and one on the organizational changes. Firstly, on the Gucci brand, obviously, Japan contributed to the bulk of the 6% retail sales growth. I'm sure you had very strong like-for-like there. Could you perhaps comment on the evolution of retail like-for-like in the other regions, maybe qualitatively to explain what happened? Excluding the effect of space. On Gucci again, I appreciate the new regional growth disclosure, but could we get an update on wholesale? What was the underlying growth? Excluding the effect on conversions, excluding the effects of door closures, and when would you expect wholesale for Gucci to return to normal? Finally, on the luxury division's organizational changes, what does it mean exactly in terms of potential manufacturing, distribution, cost synergies across the various brands?
Perhaps M&A strategy, would be good to have an update from you and Jean-François on external growth strategy in couture watches, perhaps in the affordable luxury segment. Thank you.
Good evening, Thomas. First, about the like-for-like trends. As you know perfectly, we don't provide details on like-for-like sales performance. However, as detailed in our fiscal year 2013 results presentation, all our action plan for 2014 are fully focused on organic growth in order to ensure we get back to positive territory across all regions gradually. Action plans are in place at Gucci to be able to achieve this foundation with a gradual improvement that should materialize quarter after quarter. It's already the case in MEA in Q1 compared to Q4. Globally, we can say that overall sales patterns have improved or at least remained stable compared to Q4 in all regions, even if, of course, as presented or explained during my speech, in the U.S., it was somewhat more difficult considering the weather conditions.
About the wholesale issue and the fact that we had, during the Q1 and Q2, specifically closed some doors and decided to buy back some operations. We won't elaborate in detail on this trend. What we can say is that we believe that having decided to reduce the deliveries to some partners or to have stopped working with some partners may have represented something like 2% of growth for this quarter globally. That we had, for example, as regard the Russian operations, rather a slightly negative impact for this quarter because we have stopped delivering some product that has impacted Q4 2013 and Q1 2014 sales, and we have not yet the full impact of the operations in our stores. Good evening, Thomas. Jean-François speaking. About your second question, what I can tell is that this move aims at specializing our follow-up of our brands.
In doing so, we will also enhance existing synergies and also explore further synergies, particularly in the hard luxury field. There is no change whatsoever in our strategy, nor in our M&A policy. As you know, we remain focused on organic growth for our brands.
Thank you.
We will take our next question from Paul Swinand of Morningstar Investment Research. Please go ahead. Your line is open.
Good evening. Thank you for taking the questions. Just wanted to ask about Gucci. You mentioned that the average selling price is up. Is that more due to eliminating the opening price points, or is it more high value-added goods being sold in the mix?
Good evening, Paul. Just to precise, the average selling price is still up double digit during this quarter year-on-year on the leather goods category and more specifically on handbags. One third of this is still driven by price increases, but two third due to the mix. In the mix, clearly, there is part due to the elimination of entry price products, and it's particularly true now for several quarters in the small leather goods category and the travel bag category. Of course, if you look at the assortment of the handbag, we have also an impact due to the elevation in terms of assortment and the availability in the assortment on the shelves of more sophisticated products with higher price points.
Is there any region or any area that there's resistance to the increase in the quality of the mix or the price increases?
By definition, I think it's clearly the challenge of the brand that we are actually facing in Asia, and it clearly explains the slowdown in Asia. Conversely, I think it explains also the success of the brand in Japan, where the strategy is implemented now for several years. Clearly in China, for instance, the fact that we have decided to limit or to restrict some deliveries in the stores of logo small leather goods had an impact on the traffic and on the profile of the clientele.
Excellent. That's very helpful. Then quickly, a similar question on Puma, just as you reset the brand, positioning more to sports. How much further do you have to go? It sounds like you're sort of flat now. Is there still a lot of product, of the old strategy product to be eliminated, or are you pretty much done with the reset and it's just on from here?
Well, we are on our way, and tomorrow at Herzogenaurach, there's a 360 meeting where they will introduce the new product for next collection, next winter collection for next year. This is an ongoing process, and the fact is that we are going to launch a few new products. Again, like we have said already, most of the new products will come next year. Spring and summer, but mostly autumn and winter.
Okay, great. Thanks again, and best of luck.
Thank you.
We will take our next question from Paula Bertini of Exane. Please go ahead. Your line is open.
Hi. Thanks for taking the questions. I wanted to ask, Mr. Pinault was reported saying that more lifestyle acquisitions could be coming if the turnaround of Puma is successful. Should we read this as a sign of confidence on the prospects for Puma?
Yes, we are very confident in the ability for the Puma team to turn around the company and to resume strong dynamics in sales. Yes, we are very much confident about that.
Okay. You're seeing encouraging signs on the brand recently. Maybe if you can elaborate more on this.
Yes. We have seen very encouraging signs within the company and also with our distributors, with also the observers of our products. We are quite enthusiastic about how the new products are received, not only by the customers but also by the consumers. As I said, we think that we are on the good path.
Okay. Thank you.
We will take our next question from Carole Madjo of Barclays. Please go ahead. Your line is open.
Hi. Good evening. Just a couple of questions from me. First of all, on Gucci, the retail trend in Q1 up 6%, I think that compared to about 3% in Q4. How much of that 6% was driven by those franchise buy-ins in Russia and other buybacks? Secondly, you obviously commented that mainland China improved in Q1. Can you give us the growth rates compared to that Asia number up 2% at retail for mainland China and also Hong Kong? Perhaps you could also give us a little bit of an update of where we are on the brand repositioning in the market in terms of the leather percentage of the handbag product and logo versus non-logo.
Finally, on China, if I can you just give us an update on your plans for your openings, closings, and renovations this year and where we are on that after Q1? Thank you.
Thank you, Hélène, and good evening. About the retail trend, as answer to Thomas, we don't want specifically to quantify this, and it's obviously quite difficult because you have also some other effects due to the brand attraction in some countries. It's rather difficult to answer that, but we can assume that whatever the trend, if we look at the trend, I would say on a pro forma, on a like-for-like basis, would have been probably around mid-single digits, in any case, in retail. As mentioned also before, in Russia for the moment, we have not the full benefit of the conversion. It would be rather the benefit of the ultra and full buyback, but at the same time, always you have a ramp-up in terms of productivity in the store when you buy back the operation.
For the moment, we have only the benefit of having a higher margin for the moment in these operations. In mainland China, we won't provide any figures about China. What we can say is that for Gucci, the trends are still negative but improving, and the same for the like-for-like basis. Overall, in Greater China, the trends are globally improving, especially in Macau, probably more than in Hong Kong, perhaps more impacted by guided tours, but it has to be confirmed because normally Macau may be in the same situation in a certain way. Globally, the situation is improving in China. As we have already commented, the full impact of the measures and the initiatives taken, we should have this impact rather during the second half.
Your third question was about an update on the, I would say, the profile of our sales in terms of logo, non-logo, and leather, non-leather. I will provide you with the figure, of course, but I think what we want to stress is that it's not the only one indicator of the improvement or the upscaling strategy of Gucci. However, just to provide you with this information, on a worldwide basis, no logo now represents 63% of the handbag category, to be compared to 48% in Q1 2013. By country, Japan is by far the most advanced market, with no logo being around 79% of handbag sales. Europe and U.S., around 67%-68%. Greater China, just to give an indication, is around at 51%, to be compared to 35%.
When it comes just to leather bags now represent 70% of the sales, to be compared to 56% a year ago. Your last question, yes, about the refurbishment and the opening policy for this year. For the moment, we have not changed our strategy as regards our planning for this year in terms of refurbishment. As of the end of this quarter, on the net, we have opened only one store at Gucci. What should be stressed is that it has to be analyzed the following way. You have plus five stores in Russia. You have plus five corners of our Gucci watches. Of course, in terms of average size, in terms of category of product, it's very specific. You have plus two new stores and 11 closing. It just confirms the plan that we have to close some non-efficient doors.
Just to confirm that in China, we have opened a new door in Tianjin and closed one door in Beijing, still to avoid the cannibalization effect that we had already the occasion to mention for China. As stated during the speech, we have already refurbished six stores in the quarter.
Great. Thank you very much.
Thank you, Hélène.
We will take our next question from Jonathan Guy of Berenberg. Please go ahead. Your line is open.
Hi. Just saying good afternoon, Jean-Marc and Jean-François. Just a couple of questions for me, please. First of all, staying with Gucci, could you just elaborate, please, on the opportunities within the accessories categories? You've talked a lot around the handbag positioning, but it seems to me that there's still quite a lot of work to do in terms of price mix, elevation with regards to accessories. I was wondering if you could elaborate on what you're doing within the accessory categories first within Gucci, please.
In fact, at Gucci, we mentioned the dynamic performance or the good performance of handbags in the retail network, plus 12%. We have launched, a few years ago, the kids category, which is for Gucci, a way of enlarging the number of categories and to tap into new categories of clients. With this category, along with the one of the silk, which is also a very important category for us to attract new clients, since we have no more accessible products, affordable products in the handbags category, it's really important to keep part of the clientele in the store with products which are accessible. Clearly, silk category is in that category. When we look at silk and the kids category, these are two categories with double-digit increase of the sales in the stores. This is two categories representing almost 6% of the sales in the store.
This is very encouraging. The category that has suffered during the quarter is still the ready-to-wear, but globally, other categories performed very well. I think it's a clear validation of the strategy of upscaling the brand in the leather goods category and to expand the brand in some other categories which are more affordable and driving clientele in the stores.
Okay, thank you very much. That's very clear. With regards to the ongoing repositioning of the retail format into the Frida Giannini concept, could you maybe, again, provide an update as to what percentage of the overall store base still needs to be transformed? I think you have a deadline to get them all done by the end of 2017. From my last recollection, you had about just over 30% of the store network which still needed to be upgraded. Within this ongoing upgrade, I think you've mentioned in the past that there is potentially up to a 30%-40% lower operating cost per store. Could you just talk about the metrics as to how you sort of gauge that lower operating cost per store within the new format? Thank you.
Just perhaps to clarify the situation. First of all, it's not necessarily a deadline, but rather an objective. At the end of the Q1, 57 of Gucci store network was carrying the new store concept. As mentioned to you, six stores have been refurbished in the quarter, and the 30% that you have in mind is probably the objective that we have more or less for the end of 2014. According to our last estimate, we should be around, or it's expected 65% of the store network with the new format by the end of 2014. What we have said is that we had a combination of increased sales density or efficiency per square foot, something around, depending on the location, on the country, between 5%-15%.
At the same time, a decrease in operating cost per square foot also, depending still on the country or on the regions, something around 30% in average.
Okay, thanks. That's very helpful. With regards to Gucci wholesale, I think in the fourth quarter, Gucci wholesale was down around 11%. If I think about Gucci wholesale running through in the first half of the year, are we still expecting around about a minus 15% run rate for Gucci wholesale in the first half, and then as you annualize some of these conversions, et cetera, that you've done in Q3, that negative impact goes away? Is that how I should be thinking about Gucci wholesale?
As an answer, we do not want to provide any guidance as regarding the wholesale sales. As you know, we have been carefully reviewing our third-party distribution network throughout since two years, with the goal to further decrease the share of wholesale sales in the total sales mix. The negative offset trend in Q1 encompasses a comparison basis in Q1 2013 that still included some accounts now closed in Italy, as well as a lot of operations that have been brought back in Q2 and partly in Q3. I think about Korea, Canada and Russia. Mechanically, this trend is poised to improve gradually quarter after quarter, provided we do not selectively contemplate any further buyback in the coming quarters.
Okay, thank you. Just my final question to Jean-François. With regards to your M&A strategy, can I just confirm that you are focused on organic growth for both the luxury and the sports and lifestyle divisions?
Yes, we are. Of course.
On both, because François-Henri Pinault was recently quoted as looking at or talking about potential acquisitions within the sports and lifestyle area, which, I think, surprised some.
Yes. What he said exactly was that we will resume acquisitions when Puma has come up with a good financial performance. Until then, there will not be any acquisition in sport and lifestyle.
Very clear. Thank you very much.
We will take our next question from Warwick Okines of Deutsche Bank. Please go ahead. Your line is open.
Yeah. Good evening, Jean-Marc, Jean-François. I've got three questions, please. The first is on pricing at Gucci. You did mention some details about price mix, but just wondering if you've moved prices in April, because I think that's traditionally a month where you review prices. Secondly, on Japan in Gucci, I appreciate that this performance reflects the long-term repositioning. There obviously has been a big jump from Q4 when you were up eight to, I think, to up 32 in Q1. You said that some of that might be due to the pull forward of demand because of the VAT rise. What have you seen in April to give us some confidence that performance is not just a timing effect? Thirdly, on the other luxury brands, could you give us the perimeter effect, the perimeter boost?
You gave a hint of it in your opening comments, if you could just give a slightly more precise number, that would be helpful. Thank you.
Warwick, just before answering, can you just repeat or elaborate more about your third question? We didn't catch.
Yes. Just the impact of the Pomellato consolidation in the other luxury brand division. What was the growth like? I guess there was probably 10% sort of perimeter boost for the quarter.
Concerning your question about the price. As some of our peers, we don't consider that we can only increase the price to offset the FX variations. There is a limit in terms of price increase. No major pure price increases are planned at this stage for the fall/winter 2014 collection that will be delivered later from Q2 onwards. Of course, we could need to compensate further currency depreciation against the euro, but at this stage, we have no plan of increasing the prices. As a reminder, on average, for the spring/summer 2014, the pure price increase on leather goods carryovers was 6%, impacting mostly in Q1, but just on carryover, which is not the bulk of the sale of handbags. In Europe, APAC, and the U.S., the increases of 6% were passed on a selection of carryovers and mostly in bags and not in the other categories.
In Japan, a pure price increase for the whole leather goods collection, around 10%, had been applied in order to offset the strong depreciation of the Japanese yen. At this stage, we don't contemplate further increase, again, because of the elevation of the brand and the increase of the average selling price. The perception of the client is that Gucci is already much more expensive than before in terms of pricing. Regarding Japan, of course, the impact of the VAT increase is strong, but let me remind you that for Gucci, in 2012, sales had increased at 5%. In 2013, it was 7%, and I believe that the performance in the Q4 2013 was not due to this VAT increase. Each quarter has its specificities, positive or negative, and we are not calculating a performance, stripping out all the what if.
What is true is that the retail trends, whatever the plus or the minus might have been, is strong. What I can confirm is that the trends on a month to date basis are still very positive in Japan, reflecting the strength of the brand in Japan. For your last question, for the Pomellato impact, Pomellato represents something like 10% of the sales of the other luxury brands on the quarter.
Thank you. If I may just, a follow-up or a clarification. When was the Japanese 10% price increase implemented exactly?
It was implemented, as I mentioned, on the spring/summer 2014 collection, mainly impacting end of Q4 and the Q1 2014. Again, please keep in mind that we are talking about carryover in the leather goods category, and mainly handbags. Handbags is 35% around that of the sales of Gucci, carryover is not the majority of that.
Okay, that's very helpful. Thank you very much.
We will take our next question. Antoine Belge of HSBC. Please go ahead. Your line is open.
Yes. Good evening. It's Antoine Belge at HSBC. Three questions. First of all, could you come back on the numerous management changes for Gucci throughout Asia? It's quite unusual to see many countries changing management at the same time, you're still looking for the new CEO in China. What's your analysis of what went wrong in those countries, what are the improvements that you expect by those replacements? Second question, I think you mentioned Russian tourism having impacted negatively Western European sales. I understand that for a brand like Brioni, it's quite significant, how much would Russian tourists account for Gucci, for instance? Finally, you mentioned, I think, quite a number of closing and only one, I think, in China, I think there were 11 in total. Could you maybe tell us in which countries you've closed stores as well?
About the change in management in Asia, what we want in this avenue of elevating the brand is bring the brand to the next step. To do so, we feel that we had to bring in new experience, new know-how. We changed the CEOs and also a few key positions in Singapore, in Hong Kong, in China. Yes, we are still in the process of hiring or moving the new CEO of Gucci China. Concerning the Russian clientele, just to give you some raw figures. Globally, the Russian tourists represent something around 8%-10%, depending on the brand, in the European retail sales. If you add the sales to the Russians, and I will add also the Ukrainians, globally, the sales locally represent something like 2% of the total sales.
All in all, depending on the brand, the sales to the Russian clientele is something around 1.5%-3%, 4%. It's, of course, more material for Brioni, representing something like more than 20% of the sales of Brioni. Globally, what we can say is that locally, the sales to the local world, quite stable. The issue was rather so on the tourist traffic, which was down double digit, even if it's not easy to analyze it, because, of course, for a brand which is very hot, like Saint Laurent, in terms of Russian tourist traffic, it was up double digit. The same for Balenciaga. For the main brand, it was down double digit. I think it's quite consistent with the figures of Global Blue, which show a decrease of sales to the Russian tourist of 17% during the month of February.
Maybe just on this, maybe since you're talking about tourism, have you seen a change sequentially versus Q4 in terms of Chinese tourism in Western Europe?
The trends for the Chinese tourist flow are positive, are still up for all the brands in the group. Depending also, again, about how the brand is out with the Chinese clients, but it's up. Of course, not at the same pace as in the past. Especially, I think the Chinese tourist traffic was still good in Europe, but still more contrasted in Asia Pacific. Now, coming to your question about the store closures. In fact, as mentioned, we had one closure in China, and the other ones were mainly in the more mature countries. In terms of, we had bought back the Saks network a few years ago, as you can remember. Some of these stores were not performing well, and it was already contemplated to close some of them at the expiration of the lease.
For example, we have something around six stores closed in North America, among the total of 11. You have a small store in Paris, recent anomaly that has been closed. It was small in terms of square footage and also cannibalized by the big one, Rue Royale. At the end of the day, we have decided to close it.
Okay. Thank you. Maybe just can you maybe give us the holding of Kering in Puma at the end of the quarter?
Unchanged compared to year-end.
Thank you.
We will take our next question from William Hutchings of Goldman Sachs. Please go ahead. Your line is open.
Good evening. I had one question on Gucci and one on the European luxury consumer. The first one on Gucci is, when do you expect the logo Gucci product and the non-leather Gucci product to start growing again? Because clearly it's declining year-over-year and has been for a couple of years. When do you expect that product category to start growing? The second one on the European consumer, are there any signs of life? I know you said in your Europe comment that apart from the U.K. markets, presumably the U.K. market is performing quite well. Do you see any signs of an improvement for the European luxury consumer? Thank you.
I'm sorry, William, could you just rephrase your first question? We are not sure to have fully understand your point about logo, non-logo.
Yes, it's a fairly straightforward question. When do you think that the logo Gucci product, which now represents, what is it, 37% of the Gucci sales? If 63% is non-logo, when do you expect that 37%, that logo product to start growing again in absolute terms? The same for leather. When do you expect the non-leather Gucci bags to start growing again in absolute terms?
I understand that your point is not about the share of the sales, because we are rather working on reducing the share of logo products and non-leather products among the assortment. I understand that you are talking about the quantities of these products, and at this stage, it's a little bit too soon to confirm or to have a clear objective on that, because we are rather reducing the quantities available in the stores at this stage. I cannot answer to that question. The second question was about, William?
The European consumer.
Yes, I got it. Sorry. In Europe, as we had clearly anticipated, as Gucci is concerned, we see, I would say, a stabilization or even an improvement in the Mediterranean countries. Rather stabilization in Italy, and even if it's not a major market, an improvement, a significant improvement in Spain and even in Portugal. The situation is also stable in Germany, and what is more complicated is clearly France. I think it's not a surprise because I had several times the occasion to stress that for me, 2014 was the most complicated year for the French market, considering the situation of the French economy and the French consumption, or globally, the macroeconomics in France.
That's very helpful. Do you mind me asking just one more question then? Okay, perhaps I'll ask this a different way. What's the end goal for the Gucci brand? Are you aiming to have a brand that has a very small proportion of logo product and a very small proportion of non-leather product? When are we going to start to get to a level that you're comfortable with in a percentage terms then?
I think that, as we had the occasion to commence, the most sophisticated market, Japan, is a good illustration of where the brand could land in terms of percentage logo versus non-logo. As I said before, we are quite high in terms of percentage of non-logo. I would say that globally, even if it's not a target or even an objective at this stage, we can consider that once all the markets will be more or less aligned with Japan or even the U.S., we should be around something like 70/30 in terms of proportion between non-logo and logo. I think it's only at this stage the answer I can provide. Again, I want to reiterate the point that we are following strictly the strategy.
We are very confident that this is the right strategy, and the point is rather on focusing on developing the other categories to be sure that we can regain traffic in the store and keep a basis of clients who can afford Gucci products in the other categories.
That's very helpful. Thank you very much.
Alex, we will take a final question.
We will take our final question from Matthias Eiser, from MainFirst. Please go ahead. Your line is open.
Hi, this is Matthias Eiser from MainFirst. Yep, two smaller questions left from me. When you say the Puma order book is improving, do you compare the fall-winter order book with the previous year order book, or is it improving compared to your expectations or anything else? The other questions would be about the store openings of Bottega Veneta in China. How many store openings did you have there?
When we talked about encouraging signs regarding the order book of Puma, we were comparing to last year order book as of the end of March, on a constant currency basis, of course. I would also add that it's on par with our expectations, and as mentioned, it's totally consistent with our roadmap, and we should continue to see an improvement of the trend along the year, and we will see after the launch of the new collections. As regard your question about Bottega Veneta, we have opened globally five stores in the quarter without any closings, and two of them were opened in mainland China, one in Chengdu and another one in Beijing, bringing the total count in China, mainland China, to 42.
Excellent. Thank you very much.
We will now turn it back to the speakers for any closing remarks.
Thank you for your attention.
Thank you very much.
Have a good night.
Thank you. That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.