Good evening and good day to all of you. I am Jean-Marc Duplaix, Chief Financial Officer of Kering, and I am pleased to welcome you to this call and review with you our sales in the third quarter of 2013. I would like to begin with comments on sales at group level and in our major luxury and sport and lifestyle brands. After a few words on our outlook for the rest of the year, Jean-François Palus, the Group Managing Director, and I will answer your questions. Slide four summarizes our sales in the quarter for the group and in our two divisions. Total group sales were up 3.4% on a comparable basis, a slight deceleration from the first half. This overall growth rate results from somewhat divergent trends across our two divisions.
In luxury, where market conditions remained uneven, Bottega Veneta and Saint Laurent once again delivered very strong sales levels and growth, largely propelled by their retail networks. Gucci sales, for their part, reflected the short-term impact in some regions of the ongoing process of brand elevation with regards to both distribution and product offering. This largely explains the discrepancy between retail and wholesale in the period. Our other luxury brands, which for the first time included Pomellato this quarter, delivered good performances. In sport and lifestyle, the market environment did not improve, particularly in Europe. Against this backdrop, our division's sales were down less than 1%. The new Puma management team is, for the most part, in place and at work, both on the execution of the transformation plan announced last year and on the definition of the brand's relaunch.
I will now move on to slide five, which gives you a snapshot of the quarter in our luxury division. Our luxury goods business posted positive performances driven by solid growth in retail sales, up nearly 8%, broadly consistent with the trend seen throughout the first half. Wholesale sales were up slightly in the quarter. This is largely the consequence of our ongoing strategy aimed at streamlining our distribution network across all key brands and regions. Overall, growth was well-balanced between mature and emerging markets. All key regions, Greater China included, demonstrated positive sales growth. Trends were especially strong in Japan, up 14%, led by outstanding sales numbers at Gucci, Bottega Veneta, and Saint Laurent. By product category, growth in sales this quarter was again fueled by solid increases in our fashion and leather goods businesses, up 6%, while trends in hard luxury were somewhat more volatile.
With the consolidation of Pomellato as of July 1st, we integrated an additional 53 directly operated Pomellato and Dodo stores on top of the 39 net openings the luxury division's brands carried out in the quarter. Let's now look at Gucci on slide six. Gucci posted positive sales growth driven by retail up 4%. The Gucci retail network now accounts for more than 77% of the brand's total sales, an increase of over two percentage points compared to last year. In contrast, sales made through the wholesale channel were down. This is the anticipated result of Gucci's strategic approach to distribution. The brand's distribution to third parties is getting more and more selective as it seeks to ensure an absolutely consistent consumer experience across all its markets. By product category, trends were solid in handbags and shoes, up 6% and 9% respectively in the retail channel.
Handbag sales were especially dynamic, led by solid success of the newly introduced no-logo leather lines, Bamboo Shopper and Lady Lock. Leather styles now represent close to 70% of all handbag sales. This is up sharply from less than 50% a year ago and underscores the relevance of our strategy. Gucci's move towards increased product sophistication was also highlighted by the lower weight of logo handbag. No logo items represented nearly 55% of total handbag sales in the quarter, 20 percentage points above the same period last year, translating into a further improvement of the product mix. All in all, thanks to this initiative, the average retail price in leather goods was up another 10% compared to Q3 last year. Trends by regions were fairly contrasted. In Asia Pacific, the push towards greater product exclusivity had a short-term impact on traffic.
In China, for example, the strategic fine-tuning of the brand product offer, combined with a few store relocations, temporarily hampered top-line progression. In Japan and in the U.S., excluding Hawaii, the robust outcome clearly demonstrates that this strategy is firmly paying off in the markets where it has been established first with steady growth quarter after quarter. Western Europe faced a fairly soft quarter on the back of muted spending from the local clientele. Gucci's sales in Italy, its largest European market, were impacted by both tough economic conditions and the end of our rationalization of third-party distribution. As of September 30th, Gucci operated 461 stores, a net addition of six stores during the quarter, coupled with nine wholesale buybacks in Canada and the U.S. Moving to slide seven, Bottega Veneta delivered another very solid quarter, with comparable sales up 16%, extending the sharp increase posted in the second quarter.
The retail channel, which generates more than 80% of sales, was up 18%. Leather goods, once again, posted firm increases in sales. The growth of other product categories, such as men's apparel and accessories, was even more impressive, reflecting Bottega Veneta's success in tapping new clientele segments. By region, the sharp sales growth was well-balanced between mature markets, up 13% in the quarter, and emerging regions, up a strong 21%. Sales trends were especially strong in Greater China, up close to 30%. A number of projects contributed to enhance the brand's awareness and nurture its growth potential. Among those, we can mention the launch of Bottega Veneta's first men fragrance and the opening in September of Bottega Veneta's first maison concept in Milan's Via Sant'Andrea, whose first results are already ahead of expectations.
As of September 30th, Bottega Veneta operated 215 directly operated stores, with six net openings during the quarter. On slide eight, you will find a recap of Saint Laurent's sales. In the third quarter, Saint Laurent posted a 12% increase in sales. This was driven by the 15.15% growth in retail sales, showing a consistent improvement quarter after quarter since the beginning of the year. This solid retail activity validates the successful rollout of Saint Laurent's new store concept and renewed emphasis on directly operated distribution. By product categories, sales this quarter were once again fueled by strong performances in ready-to-wear, both for men and women, underscoring the relevance of the brand's return to its fundamentals. At the same time, clients reacted very positively to the all new lines of shoes and handbags.
The Saint Laurent brand resonates extremely well in its most mature markets, where sales were up 14.14%, deepening its already solid awareness. Sales were especially buoyant in Japan, up 31%, while Western Europe remained very solid, and North America improved consistently. The high volume of editorial coverage, coupled with retail openings and store renovations in Asia Pacific, will enable the brand to gain increased momentum in emerging regions. As of September the 30th, Saint Laurent had 110 directly operated stores, with six net openings during the third quarter, of which four in Asia Pacific. Moving on to slide nine, I will now discuss our other luxury brands, which all together enjoyed revenue growth of more than 9%. In line with the trends of the first half, sales growth was driven by designer brands as Stella McCartney and Alexander McQueen both enjoyed solid double-digit growth.
At Balenciaga, trends accelerated compared to the second quarter, with ready-to-wear and footwear leading growth. Brioni sales posted high single-digit growth, driven by made-to-measure in Japan and sustained growth in North America. Brioni also bought back five franchise stores in mainland China, further increasing its control over distribution. The brand is fulfilling all of the expectations set at the time of the acquisition. Trends in hard luxury were somewhat more contrasted. Boucheron enjoyed consistent double-digit growth driven by sales of jewelry and high jewelry. Newer collections, such as Serpent Bohème, proved very successful. In watches, the quarter was not as upbeat. Our other luxury brands opened 12 net new stores in the quarter, chiefly at Brioni, bringing the total network to 330 units, including Pomellato.
Moving on to slide 10, let's have a look at our sport and lifestyle division, where dynamics by category and region were broadly similar to the first half. While footwear sales remained down, apparel and accessories posted mid-single-digit sales growth. Retail sales were also solid across both the Puma and Volcom brands. On its own, Volcom sales were encouraging, up 2%, propelled by solid progression in newly launched footwear styles and good resilience in apparel. By region, Volcom sales grew solidly in its core North American market, while trends were more volatile elsewhere. Sales of the Electric brand were still impacted by its ongoing refocusing on accessories, which is currently gaining speed. New product categories such as watches were launched in the past few days and are off to a promising success with demand running four times faster than forecast. Now a few words on Puma on slide 11.
In the quarter, Puma comparable sales were down less than 1%. Like its peers, Puma sales were again hampered by strong adverse currency impacts, particularly in Japan, which were exacerbated by strong volatility in emerging market currencies. The trend in Q3 was solid in retail, up 6%, with all three channels, mainline stores, outlets, and online, all contributing to this improvement. Moreover, sales growth in our mainline stores was positive on a like-for-like basis. By product category, the overall picture was in line with the first half. Accessories and apparel continued to drive revenue up 7% and 4% respectively, but did not fully compensate for soft footwear sales. Regional trends were also contrasted with a pickup in North America. In Western Europe, which is Puma's largest market, trends were still negative, with uneven patterns across countries. In the quarter, Puma implemented additional steps in its transformation plan.
More than two-thirds of the planned door closings are now completed. Puma also continued to work on streamlining its organization. 23 separate country organizations are being combined into just seven regions. The Iberia region of Spain and Portugal is now up and running on the footsteps, the DACH, D-A-C-H, region comprising Germany, Austria, and Switzerland. Puma has also made more progress in the consolidation of its warehouse network, with closures in Portugal and Hungary. Reorganization is also underway to concentrate some business unit teams in a single location and avoid duplication. For example, running, training, and fitness teams are now all located in Boston. Looking to product assortment rationalization, SKU count in the forthcoming collection will be streamlined by 10%. We are making good progress in the re-engineering of our design development and sourcing processes.
As part of this, we are shutting down the product development center in Vietnam to move prototyping back to the vendors and accelerate time to market. When we released our first half results, Jean-François Palus shared with you the main priorities we are working on to relaunch Puma. One of the key areas of focus is product design and positioning, and the newly appointed global creative director will be at the center of this long-haul effort. Shorter term, Puma is on track to deliver on its full-year sales guidance, which calls for sales down low to mid-single digit currency adjusted in 2013. A few words of conclusion here on slide 12. As you know, in luxury, we are building a well-balanced group with strong and complementary brands enjoying different levels of maturity.
At Gucci, our focus is on further refining the exclusive upmarket positioning of the brand and of its distribution to secure its long-term growth and profitability. It may impact short-term comparisons, but we are confident that it is the right way to steer the brand and fully take advantage of its markets. At the same time, all of our other brands, medium-sized or smaller, are genuine drivers of growth and profitability. Our work is to make sure they continue to deliver this under the best, most sustainable conditions. Sport and lifestyle. Our priority is to return Puma to the positioning and performance the brand deserves. This requires to implement, if necessary, to intensify our existing transformation plan, which aims at streamlining the company's organization and processes. This transformation will not bear fruit overnight, our action plans are in place and progressing.
At group level, in the short term, we expect continued instability in the currency markets as well as in the economic and consumer environments. We take this into account in our day-to-day management as well as in our budgeting processes. We are particularly vigilant when it comes to supporting our margins, starting with our gross margin, are determined to continue maintaining a tight financial discipline. This ends my introductory remarks. Jean-François and I are now ready to take your questions. Operator?
Thank you, Mr. Duplaix. Ladies and gentlemen, if you would like to ask a question at this time, please press the star or asterisk key followed by the digit 1 on your telephone. Please ensure that the mute function on your telephone is switched off to allow your 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 2. Again, please press star 1 to ask a question, and we will pause just for a moment to allow everyone to signal. We'll take our first question from Thomas Chauvet from Citi. Please go ahead.
Good evening, Jean-Marc, Jean-François. Three quick question on Gucci, please. The first one, thank you very much for sharing the mix of handbags. If I understand correctly, 70% of the exposure to is leather, 55% no logo. Is it exactly where you want to be now, or should we expect further penetration as you implement the repositioning strategy in Asia? I was also surprised this change in mix was so pronounced year on year, and the 10% implied increase in ASP you referred to doesn't have a greater impact on revenue. If you could comment on that. Secondly, still on Gucci, what are the difficulties you're referring to in terms of repositioning the brand in Asia-Pacific? Isn't it what actually the consumer is looking for, more handbags made of leather and no logo?
Is that disruption, I suppose that's retail rather than wholesale, where you don't have much exposure there. Thirdly, when you continue, I think, to guide for margin improvement at Gucci in the second half and perhaps longer term, can you explain what are the main driver of that margin expansion given that deceleration in like-for-like in the third quarter? Is it fair to assume that you're talking about margin expansion at reported FX rather than excluding FX, where perhaps margin are going to be down, I think, as they were in the first half? Thank you.
Thank you, Thomas. I note that you have, in fact, four questions, but I will answer to the four questions. First question about the repositioning. Yes, we have still some progress to make because if you look at the average worldwide, we have now almost 55% of no-logo products within the category of handbags. But it's something around 60% in the major countries, it's around 70% in Japan, but it's only 40% in Asia-Pacific. We have still progress to make in Asia-Pacific and especially in China. We will continue to focus on this no-logo categories, more leather. It explain also what we have decided also to make the same move with some other categories like the small leather goods or luggage, because they are still driven by logo sales around 70%.
We have decided to reduce the volume of this entry price category and the logo category in this small leather goods and luggage category. This is the first answer. We are not yet over with this transformation and this upscale of the brand in terms of share between logo and non-logo. Concerning the average selling price, we are talking about handbags only, it is +10% globally. It is quite consistent with the increase of the average selling price in the past four years because I remind it was 40% over four years, mainly driven again by product mix. Only one-third again this year linked to the price increase because we have posted only one price increase in the year, in April.
In fact, as you know, we have a decrease of volumes, partly due to some decisions to reduce some categories, but also to the fact that you have less traffic in some areas, some regions, especially Asia-Pacific. We have globally an improvement and positive traffic in the more mature countries. Coming back now to the retail, what we have to fine-tune, in fact, is that we believe that we are on the right path in terms of upscaling, in terms of elevation of the brand for the merchandising side. We believe that we need to improve in terms of retail excellence, and especially in China. It does mean that we need to train our sales associates. It does mean that we need to retain these associates, but it means also to refurbish and relocate the store.
That is the reason why we say that we have still some room for improvement, for retail excellence in this area, and we will focus on that and further the efforts put on that for the coming months. It is partly linked also to your last question about margin and gross margin. What we believe is that we are in a position due to the improvement of the product mix and this increase of the average selling price to increase the gross margin despite the currency and hedging effect. It does mean that without hedging and currency effect, we will improve the gross margin. As already said, we will probably reinvest part of this in the store expenses and in the marketing expenses in order to sustain and to back this policy, this strategy of improving the retail excellence.
Thank you, Jean-Marc.
We will take our next question from Luca Solca from Exane. Please go ahead.
Thank you very much. Good evening. A couple of questions, if I may. Within the context of a positive update, your figures, like the ones from your peers a few days before, seem to confirm moderation in the third calendar quarter. I wonder how you see current trading figures and whether you see any uptick in demand trends against easier comparables as we move towards the end of the year. That would be my first question. I wonder about the Redcats disposal, whether you have any update on this, whether you still see the guided timeline for this to apply, and if you continue to see the end of the year or the early part of 2014 as the most likely date when you can execute this.
I wonder if you could, on the demand trends actually, give us a bit of an insight to whether the new legislation in China about tourism and package tour prices is impacting your trading in the area, in Hong Kong and Macau, in any meaningful manner. Lastly, I wonder if you could comment on your current holding of Puma. What is the percentage of equities that you currently own? Thank you very much.
Thank you, Luca, for your questions. Even if the sound was not totally good, I hope that I catch all your questions. Concerning your question about the soft quarter, what we can say is that we have different trends depending on the region. It was indeed quite soft in Europe due to the bad or the weakening of the demand of the local clientele. Also after a month of July, which was particularly low due to the Ramadan effect, and it's true that our brands, especially Gucci, were not able to pick up in the last two months of the quarter. In Asia Pacific, we have a global situation.
I mentioned, especially in China, with, I would say, contrasted trend in the luxury industry in China, but some sign of improvement in Korea, which is obviously a good news, and still weak condition in Taiwan and Singapore. Globally, on the other markets, the Q3 was particularly good and still in line with the first half in the U.S. or in Japan, and we didn't observe any significant sign of deceleration. Of course, I won't comment about the current trading because we never provide such information about the current trading. About the La Redoute disposal, or I would say the La Redoute disposal.
Yes. Good evening, Luca. This is Jean-François speaking. Well, we continue to discuss about La Redoute with the potential buyers. We are on our way to consummate the transaction before the end of the year. This transaction is likely to be closed in the first half of next year.
Concerning your question about the impact on our brand from the change in regulations regarding conducted tours, we believe it's too early to gauge the impact as the new regulation came into force on the 1st of October. Having said that, it is something we monitor carefully internally. First, to be precise, the new rule impacts Chinese nationals in China, but also outside of China when they travel to Hong Kong, Southeast Asia, which area is particularly prone to duty-free shopping with attractive prices. We believe that it could have some limited impact for our brand, especially for Gucci or Bottega Veneta, given that our presence in these countries is primarily directly operated stores. For instance, in Hong Kong, we only have a handful of wholesale doors in duty-free stores that we understand are the most impacted by the change.
There is still a question mark as to whether or not the new rule on tours is impacting traffic generally and to what extent. We will carefully look at this in the coming months. Finally, concerning the question about Puma, we are still buying in an opportunistic way some shares when they are available on the market. We are still around 84% of shares in Puma.
Thank you very much. Can I just ask you an additional question about Gucci, and whether you believe that the wholesale rationalization process is currently achieved, or whether you see more of that down the road?
I would say that it comes to an end in Italy, probably. In the U.S. or in North America, we have made significant progress in the past year, we don't anticipate at this stage any major new changes. You know that we will have some also buyback of franchises and wholesale doors in the coming months in some other regions, for example, in Russia. We are still waiting for an impact of this wholesale rationalization in the coming months. To a lesser extent, considering that we made already some significant progress in North America and Italy. Clearly, we are focused on improving our retail trends, which were positive during this quarter, and we are focused on this retail excellence.
Thank you very much, indeed. Thank you.
Our next question will come from Antoine Belge from HSBC. Please go ahead.
Yes, good evening. Antoine Belge of HSBC. First of all, to follow up on this rationalization of wholesale in Italy, would it be possible actually to have the wholesale evolution excluding that to get a feel of how much it weighed on that performance? My second question relates actually to retail. I think you mentioned that the brand elevation process was in good shape. From a retail perspective, I think the so-called Frida concept is only a bit more than your total network. I think you have a target to get to 100% by 2017. Are you having better performance there? Maybe a bit of color on that. Finally, when you look at the dollar at 138 and the yen at 134, I think the average hedging rate for you will be on the yen or some 20% below next year.
What kind of theoretical impact on margin could we expect from that?
Good evening, Antoine Belge. Thank you for your questions. About the wholesale, we won't provide any detailed figure except that we have a minus 9% globally on the wholesale channel. Considering also that, as I said, we have accelerated the pace of wholesale rationalization in Italy, it does mean that we were double digit down in Italy in the wholesale accounts. About the Frida concept. You are still right to recall that we have a plan to have 100% of our stores with the Frida concept by 2017, coming from a little bit more than 50% today, with 60% in China. What are the main impacts? First, on capital expenditures, this means that our budget of CapEx won't increase, but there will be a shift from the CapEx dedicated to new openings to refurbishments. We'll continue to refurbish some stores year after year.
Second impact, which is clearly very important, is the improvement of the sale density when we change the concept. It's also part, I would say, and it come back to the question of retail excellence, I think the design of the store and also the layout of the store, including some rooms for VIP, is totally consistent with our policy of elevation of the brand. We'll continue, and I don't see any reason to stop this plan of refurbishment, except that, of course, we may fine-tune and adapt to some client expectations. We know that we can improve some elements of the concept, but globally, we are on the right pace for this plan.
Concerning your currency effect, the question about the currency effect, I think first, if I understand correctly, it's an anticipation not only for the end of the year, but also for next year in a way. Globally, what we can expect is that over the year, we should have an impact of currency effect and hedging because we have this positive of hedging that should be normally globally consistent with the one we have recorded during the first half. For the full year, we should have something which is more or less comparable. For the next year, our projections show that normally the hedging impact should be relatively neutral, with no significant negative or positive impact.
Okay, maybe just two quick follow-ups. Just on La Redoute. There was an article in the French press mentioning some recapitalization needs of around EUR 300 million. Could you confirm that figure? Maybe, I was also quite surprised by the speed at which non-logo is decreasing and also leather is increasing. Would that mean that, I think to get to the sort of very significant changes that you mentioned that, for instance, logo product in volume will be down 20% or 25% globally?
The capital increase at La Redoute is an element of the discussions that we have with potential buyers, it's way too early to elaborate about that. About the merchandising policy and the product assortment globally, what is the key indicator for us is the leather and at the same time, no logo product, because you can have leather products with logo. It's the case, for example, for the small leather goods, because it's 75% leather, and at the same time, it's 73% logo. What is important is the global change and shift from canvas logo to non-logo leather. Globally, what I can say is that with the more mature countries and the more sophisticated country, which is Japan, we have something around 60% to 70% of non-logo products within, again, the category of handbag.
I think it's a good indication of what could be the global split of the global balance worldwide in the long run.
Okay, thank you.
We will take our next question from Warwick Okines from Deutsche Bank. Please go ahead.
Yeah. Good evening, Jean-Marc, Jean-François. Three questions, please. Firstly, could you give us a rough idea of what the European region is within the Gucci wholesale mix? Just interested in the proportion of sales of wholesale in Europe. Secondly, you mentioned there had been some disruption in Greater China for Gucci from relocation. I was just wondering whether that relocation process is over now, whether that disruption might continue into Q4. Thirdly, could you give us some sense of the other luxury divisions' FX impact in Q3, please?
Okay. What is important to know that the share of wholesale channel in the sales in the European region is something around 37%. We have, of course, despite this rationalization process, some very important partners in Europe we want absolutely to keep. We are working well with them in terms of safeguarding the exclusivity of the brand, and clearly, for us, it's important just to maintain a certain level of wholesale sales in Europe. As a reminder, it's around 21%, for example, in America and non-significant in Japan and APAC. About the relocation process in China, as I mentioned to my speech before, the elevation of the brand clearly is an ongoing process, and it will take time. It does mean that for China, we have opened only two doors net in Greater China for year to date, and only one during the quarter.
For the last quarter, I don't anticipate additional closures of doors. Clearly, we are very cautious about the location of our doors in China. For 2014, we will continue to look at this carefully. As a reminder also, we have more than 50% of our lease expiring in the coming years. It will give us some room to relocate some stores or to renegotiate the terms of some lease to improve or increase the profitability of our stores. Can you remind me your last question? Because I think it was about FX in the other luxury brands, if I'm correct.
Yes, that's right. Just to know what the FX impact was in the quarter.
Okay. On a comparable basis, the increase of the other brands sales was around 9%, and it's 15% reported.
Sorry, Jean, some of the gap in between those will be a perimeter effect, which is what I'm trying to get to.
Yes, we are looking at that. We have something around plus 10% due to scope effect.
Great. Thank you. Just to clarify your answer to my first question on wholesale in Europe. Were you saying that within Europe, Gucci is 63 retails and 37 wholesalers? Did I understand that correctly?
Absolutely, yes.
Yeah. That's great. Very helpful. Thank you very much.
You're welcome.
From Matthias Efert from MainFirst. Please go ahead.
Yes, hi. Matthias Efert from MainFirst. Sorry again on the short-term negative impact on Gucci in China. What makes you confident it's just a short-term impact? Have you seen already any indications things are improving there? How would you define short-term? Is it just a quarter or could it also be a year? Secondly, on the tourist flows in Europe and the business with tourists there. You mentioned Middle Eastern tourists. How was it with other tourist groups, in particular Chinese? Has there been a bit of a slowdown compared to previous quarters? Or was the deterioration in Europe purely based on the local clientele? Could you also spend a minute on the slowdown of Gucci in North America? Was it also a wholesale rationalization impact, or was that generally also a bit of softer market conditions? Sorry. Thank you.
Thank you for your questions. I don't want to elaborate about short-term trends in Gucci, in China. As we said before, it's an ongoing process. It will take time, we already said that when we implemented this strategy of elevation of the brand in Japan and in America. I cannot say that it will be next quarter that we will see necessarily an improvement. I would say that globally in China, you have two specific issues. One, which is globally, the market is temporarily more difficult, more curbed due to some different reasons, economic reasons, clamp down against the bribery and so on. At the same time, we have the specific issues of Gucci. What I can say also is that when I look at the performance of Gucci in tier 3 cities, for example, the performance is still very good.
When we have the right location with the right team in the store, we see directly an improvement. That's the reason why we will invest in retail excellence in the coming months to improve the situation, because we have clearly the demonstration that when we have the right location and the right team, we have a good performance. It's really a question of investing in people. Your second question was about the tourism flows. It's true that tourism flows coming from Middle East were quite low during the quarter. The Japanese tourists, of course, the sales to the Japanese tourists are down, but it's globally on a worldwide basis due to the situation of the JPY. It's a double-digit decrease in Europe, but globally in all the destinations of the Japanese, especially, for example, Guam or Hawaii.
For the other categories, we have very good figures for Gucci and for the brand, of course. For example, we have almost +10% with the Chinese cluster in Europe, +22%, or +20%, I would say, with the Russian and Eastern. Globally, we have not observed a decrease of tourism flow. What is weakened absolutely, for the moment currently in Europe is clearly the local clientele, especially in Italy. When we look at our retail performance in Europe on two important markets, we have quite decent performance in France and also good performances in the U.K. Finally, about North America. In fact, the performance of Gucci during this quarter in North America was, again, penalized by the slowdown of tourism flows in Hawaii. It's double-digit decrease.
If you look at mainland USA, the performance in the retail channel is +6% in mainland USA, and a double-digit in Canada. It's true that we have decided also in the wholesale channel in the U.S., first, you have still the rationalization with the buyback of some corners. In Canada, with our friend Fu, an additional corner with Saks in the Midwest, if I remember well. In addition to that, we have decided also to reduce the shipping of some categories of products, in logo products especially, in order to preserve the exclusivity of the brand.
That's very helpful. Thank you very much.
Thank you. We'll now take a question from Catherine Rolland from Kepler Cheuvreux. Please go ahead.
Good evening. I have several questions about Gucci, please. First of all, I just wanted to know if you raised prices in Japan in Q3, if you have any plan of any price increase in the short term in Japan. Second point about China, for Gucci, could you be a bit more precise regarding the sales trends in mainland China and Greater China in Q3? Could you also give us a color about the sales trend to Chinese customers in Q3, including sales to tourists? Last question about the leather products and the non-logo products. You gave us some indication for handbags. Could you give us some kind of information for handbags and small leather goods, including all these product categories, please? Thank you very much.
We didn't raise the price in Japan in Q3, neither in other regions. We have posted an increase of price in April at Gucci during the second quarter, we didn't raise the price in our brands, not only in Gucci, but for all the brands in the Q3. For China, we won't provide any figure about China. Globally, the performance is negative. Low single digit negative in Greater China. It just means it's negative, of course, on a like-for-like basis. Due to the weight, however, of the Chinese clientele in mainland China and in Hong Kong, globally, despite the very good performance of sales to Chinese people in Europe and the booming of the sales to the Chinese in America, it has not offset the negative performance in China.
Concerning your last question, I already provided some indication before, saying that globally, for the small leather goods on luggage, you have approximately 70%-75% of the sales with logo products. When it comes to leather, by definition, in small leather goods, it's mainly leather, but with logos, so it's 75% leather. For luggage, it's globally 40% leather and 60% canvas, approximately.
Okay. Could we assume that the sales trends in Mainland China were rather similar to the sales in Greater China, or was there any difference in sales trends in Q3?
We had already observed an improvement in Hong Kong and in Macau compared to last year during the first half. We are globally more or less on the same trends as we had during the first half.
Okay. Thank you very much.
Yes, we will take a final question.
Thank you. We'll take our last question from Omar Saad from ISI Group. Please go ahead.
Thank you very much. I wanted to ask two questions. The first question on Pomellato and the growing hard luxury emphasis within the portfolio, the luxury portfolio. How are you thinking about the hard luxury piece of the business? I know it's still small, and you have some recent investments in different brands. Where do you see that development going? How do you view the category, its attractiveness, and how well it fits into your portfolio with your other, I guess, more soft and leather goods luxury brands? The second question would be, it's been really great to see the company divest many of the heritage retail distribution assets.
I'm wondering if you would ever consider, as you think about yourselves as true portfolio managers, brand managers, would you ever consider divesting any of the non-core or underperforming brands within either the luxury segment or the sports and lifestyle segment? Thank you.
Thank you, Omar, for your questions. About hard luxury, it's a conference call about the Q3 performance, so I want to elaborate about the strategy long term of investing in hard luxury. Globally, we are focused on the organic growth of our brands. All of our brands have a strong potential. Especially in some new categories, and we believe that hard luxury is also a category in which our brands can expand, and we are convinced that we can make our brands grow in that category. We believe that also, in the long run, hard luxury is a very interesting category, considering the growing size of very wealthy people in Asia Pacific. We'll continue to look at this. As regards Pomellato, we are focusing on growing the Pomellato brand first while reassessing the positioning of Dodo, especially on its retail network.
We are working first to integrate Pomellato. We have bought several assets this year. The first issue, or the first step first, is to integrate this brand. We will continue to scout any opportunities on the market, but it is not a priority.
In terms of portfolio management, we are, of course, scrutinizing the rationale for our brands to be in our portfolio, not only prior to acquiring them, but also in the course of their lives with us. Each brand in our portfolio has a role to play. They have a specific space in our stable of brands, with very little, if any, overlap. Would we consider that this role is no longer valid or that this specific space is not meaningful enough? We might consider to dispose of this or that brand. It will be more about strategic reasons than temporary financial reasons. Of course, would we consider that in the long run, a given brand would remain underprofitable or would be not capable of reaching the long-term targets that we set, then we would reconsider the brand, we could contemplate a disposal.
Thank you very much. Very helpful.
This was the last question. I would like to thank you for your attention and for all your questions. I look forward to meeting some of you in the coming weeks and later for the release of the yearly results. I invite you, and I recommend to visit our stores during the Christmas period. Thank you for this. Have a nice evening. Bye.
Goodbye.
That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.