Good evening and good day to all of you. I am Jean-François Palus, Managing Director of Kering, and I'm pleased to welcome you to our first-half 2013 results call. I will start by commenting briefly on the group's operating and financial performances in the first six months and on the key events since the beginning of the year. Jean-Marc Duplaix will review in more detail the results of our key brands and the group's financials. Finally, I'll share with you our view on the rest of the year before we take your questions. On slide four, we've summarized for you the key takeaways of the period.
Thanks to robust sales growth in luxury in the second quarter, building on the satisfactory progression of the first three months, we achieved a solid operating performance in the first half in market conditions that were not as upbeat as last year's in certain parts of the world. In sport and lifestyle, conversely, the top-line performance deteriorated somewhat in the second quarter for a combination of external and internal factors. We expect Puma to continue facing significant headwinds for the remainder of 2013. The group's EBIT margin improved once again, fueled by the performance of our luxury houses, and we achieved a sensible increase in net income from recurring operations, highlighting the healthy bottom-line contribution of our core businesses. Finally, we posted a good double-digit increase in free cash flow from operations.
The first half also saw significant progress in our strategic realignment as Christopher Kane and Qeelin were integrated in our luxury division, which was also joined by Pomellato, whose results are not consolidated in the first half but will be from July 1st. On the other hand, the spin-off of Fnac and the sale of a number of Redcats units have gotten us that much closer to our strategic goal of being a pure player in luxury and sports and lifestyle apparels and accessories. The adoption of the Kering name, which we coined to capture this new configuration, was approved by a near unanimity of all group shareholders. Slide five summarizes the operating performances of our two divisions. I will make a couple of brief comments.
In luxury, the main point to emphasize is the particularly strong achievements of our DOS networks as we continue to tighten our distribution and better control the settings in which our products are displayed and sold. While this entails higher costs as the new stores that we opened in the past year or so are now coming on stream, we are able to make further significant gains in operating margin for the luxury division as a whole, as well as in our two largest houses, Gucci and Bottega Veneta. In sport and lifestyle, the environment remained challenging both at Puma and in action sports. As Puma told you in May, the top line will remain under pressure at least through the balance of the year, and the numbers for the first half are entirely consistent with the guidance we gave you at the time.
Puma's gross margin will also remain impacted until we successfully refocus our product and channel mix. The arrival of Bjørn Gulden and the new management team will accelerate the implementation of this needed transformation. Jean-Marc Duplaix will now take you on a more detailed tour of our first-half numbers.
Thank you, Jean-François. Hello to all of you. As a reminder, all the sales figures and comments I will make are based on comparable scope and exchange rates. Unless otherwise stated, I will only comment on Kering's continuing activities, excluding discontinued assets that are separately accounted for under IFRS 5. Let me start with our performance in luxury on slide seven. In the first half, Kering's luxury division posted another solid increase in sales, up 8%. The pace of growth improved in the second quarter with a sequential increase of 3 percentage points to above 9%. This was achieved on top of strong comps last year. In the first half, sales achieved through the retail channel outperformed all sales, with directly operated store sales posting double-digit growth in the second quarter.
By region, mature markets were solid contributors to growth in the first half, showing an acceleration in the second quarter, up 12%. This was driven in part by outstanding demand in Japan, together with further sustained growth in Europe and North America. Trends were more contrasted in emerging markets, where our luxury sales grew 5% in the first half, with dynamic sales in the Middle East and Latin America. Growth in Asia Pacific was more moderate, reflecting the tougher macro environment throughout the first half, and particularly high comps. All key product segments achieved very positive performances in the first half, driven by a solid increase in sales of fashion and leather goods, which accelerated in the second quarter, up 9%. The men's lines had particularly outstanding performances across all main brands, up 15% in the second quarter.
In the first half, Kering's luxury division fostered another increase in operating profit, up 9%, with operating margin up 70 basis points to 25.6%. This improvement in profitability was achieved with a progression in operating investments as planned, as well as a positive contribution from FX. Investments remain sustained in the first half, up 50% year-over-year. This relates both to non-store and store-related investments as the division added a net of 38 directly operated stores in the first half. In addition to this, the division consolidated eight Qeelin directly operated stores, as well as converted a number of franchises and independent boutiques to controlled stores, bringing the total store count to 1,024 at the end of June. Let's now look at Gucci on slide eight. Over the first half, Gucci posted sales growth of 4%.
The trend was broadly even between the two quarters and was achieved on top of the strongest comps last year, as Gucci sales had grown 11% in the first half of 2012. Sales momentum in the retail channel remained sustained in the first half, up 6% in both quarters. This steady growth of the retail business, which now represents 76% of the total Gucci sales, reflects our strategy of taking direct control of the brand's distribution to further enhance the consistency of the consumer's experience across all key markets. By region, trends were positive across mature markets throughout the first half. Both North America and Japan recorded strong progressions in retail sales. The performance in Japan was encouraging as the local clientele showed more and more appetite for highly crafted leather products. Sales in high-growth markets were softer, with Asia Pacific broadly unchanged year-on-year in the first half.
Latin America and Eastern Europe, Middle East posted solid double-digit progressions. Within Asia Pacific, trends in China were positive as Gucci continues to implement an ever more selective approach to distribution and reposition various boutiques in different cities. Looking to the main product categories, sales of leather goods further progressed in both quarters, driven by mix improvements toward higher-priced merchandise. Sales of non-logo leather lines performed extremely well, recording double-digit growth. Conversely, sales of certain logo fabric lines were down. Trends in men's were also outstanding, still driven by the strong performance in shoes, which received an extra boost from the 60th anniversary of the iconic Gucci loafer. We continued to invest in the men's segment, which now represents close to 30% of total sales. In June, Gucci opened its first flagship dedicated to men's fashion in Milan.
In the first half, Gucci posted another increase in operating profit, up 7%, with operating margin reaching 31.7%. Underlying operating trends were very healthy, with improvements in product mix driving further positive leverage on profits. Operating expenses, primarily store on marketing-related, remained under control, and foreign exchange tailwinds also helped Gucci's EBIT margin progression. As of June 30th, Gucci operated 446 stores, and operating investments were broadly stable compared to last year. Moving to slide nine, Bottega Veneta turned in another very strong performance in the first half. Sales for the first half were up 13%. As a reminder, Bottega Veneta sales had grown 35% in the first half of last year. Sales trends accelerated materially in the second quarter to 17%, with increases in the high teens across both the retail and wholesale channels.
By region, all markets except North America, which suffered from a decline in Japanese tourists in Hawaii, posted double-digit increases in sales in the first half. Western Europe and Japan posted firm increases in sales, the latter fueled by many Japanese buying more in their home markets. Performance was also strong in Asia Pacific and China, with mainland China growing 25% in the first half. Trends were healthy across all key product categories. Leather goods, which represent 85% of total sales, posted a solid increase, while smaller categories such as men's lines posted outstanding performances both in shoes and ready-to-wear. All in all, this resulted in another improvement in operating profit, up 13%, putting operating margin at a very strong 31.5%. Gross margin was up slightly, and the sharp increase in operating expenses, primarily a result of higher store-related costs, was offset by foreign exchange gains.
Net operating investments in the period nearly tripled, reflecting new store openings and refurbishments, as well as IT and system investments to sustain growth. At the end of June, Bottega Veneta had 209 owned stores, a net addition of 13 stores during the first half, of which several high-profile freestanding openings, including Los Angeles and Beijing. Let's move to slide 10 on Saint Laurent's performance in the first half, where sales grew 17%. In the second quarter, trends were positive across both channels, with promising retail trends following the successful implementation of new store fits and designs. The new collections achieved strong sales performance in wholesale, which was up over 30% in the second quarter. Sales were robust across all main regions, with very positive developments in Europe and Japan, together with improved trends in North America in the second quarter.
Asia Pacific was solid, but penalized in the second quarter by the refurbishment of an important freestanding store in Hong Kong. All product categories contributed to growth. The leather goods segment posted growth in excess of 20% in the first half. New ready-to-wear collections, up more than 30%, also enjoyed an outstanding reception. Saint Laurent's operating profit rose 10%, a commendable achievement in light of the very strong brand investments in retail, communication, and product development incurred in the first half. The contraction in operating margin, which is primarily a function of the initiatives I just mentioned, was well contained. Net operating investments also progressed sharply, largely reflecting investments in the rollout of the new stock concept, both through new openings and through extensive refurbishment programs.
The Saint Laurent store network grew by 15 units in the first half, reaching 104 units as of June the 30th, with several high-profile openings such as the Paris Montaigne and New York SoHo freestanding stores opened in the second quarter. Moving on to slide 11, let's have a quick look at our other luxury brands. They enjoyed revenue growth of close to 13% in the half year, with trends accelerating significantly in the second quarter, up 19%. In the period, the strong momentum across all other luxury brands was fueled by strong sales of fashion and leather goods, up 13% in the first half and up 18% in the second quarter, driven notably by the outstanding performances of our two main designer brands, Alexander McQueen and Stella McCartney, which both grew in excess of 25% in the first half. Balenciaga posted promising retail performance in the second quarter.
The impetus provided by new designer Alexander Wang should generate positive traction as we move forward into the second half of the year. Brioni also showed a positive performance, with sales accelerating in the second quarter up double digit, bolstered by a very good performance of the retail channel. Sergio Rossi's sales were also very strong in the second quarter. Looking to hard luxury, sales momentum improved significantly in the second quarter, driven by solid growth at Girard-Perregaux and JeanRichard after what had been a low-key first quarter. Boucheron also grew double digits in both the first and second quarters. Lastly, the newly integrated Qeelin and Christopher Kane brands were also off to a good start. All in all, the pace of growth was strong across all key product categories as well as geographically, with all main regions showing solid increases in the second quarter.
In the first half, operating profit grew 16%, resulting in a 40 basis points improvement in operating margin of our other luxury brands to 9.9%. This performance reflects the pertinence of Kering's brand portfolio strategy, based on a constant pursuit of profitable growth without neglecting the investments necessary to nurture the development of each and every brand, while also integrating new ones. In the first half, net store openings by our other luxury brands totaled 13. Adding on top of that, the consolidation of eight Qeelin stores, this brings the total to 265 units. With slide 12, let's move on to sport and lifestyle, which faced a challenging first half, with revenues down 3%. In the first half, the division suffered from the ongoing weakness in the textile and sporting goods markets.
This was especially true in Western Europe, which represents 30% of the division sales, and where sales were down 7% in the first half. The performance of Volcom and Electric was soft in the first half, but with a slight improvement in the second quarter. Volcom sales were nearly unchanged year-on-year in Q2, with a slight improvement from the trend in Q1. Volcom would have shown positive growth had it not been for a reduction in business as a key distributor. New product launches, notably in footwear, were off to a good start and allowed us to gain access to incremental doors in selected markets around the world. Electric also faced a negative quarter as it copes with the rationalization of its product lines with a full new range of accessories scheduled to hit the stores later this year.
Despite vigilant operating expense management, the lower top-line number, combined with gross margin pressure at Puma, resulted in a 200 basis point drop in the division's EBIT margin in the first half. As Jean-François noted, the headwinds the division faces are not expected to abate for the balance of the year. Against this, we are continuing to work hard at rejuvenating the organization of all our sport and lifestyle brands. New heads at Puma, Volcom, Electric, and Tretorn have been announced, and all are now on board. Moving on to slide 13 and a few more details on Puma's operating performance in the first half. Puma's announcement yesterday confirmed its earlier forecast, with first-half performances broadly in line with the full-year guidance released in May.
By region, the drop in Puma sales was primarily driven by Western Europe, where they were down 7%, with a particularly weak showing in Southern Europe. Trends were healthier in other key mature regions such as North America, which posted a 2% sales increase in the first half, while performance in Japan improved in the second quarter. By product categories, the all-important footwear, which represents nearly half of the all sales, was down 8% in the first half. This drop reflects a combination of factors, including poor sell-through, high inventory levels, and adverse weather in Western Europe. Highly positive trends for some of the new performance launches, such as the Mobium Elite running shoe, could not compensate for the drop in other footwear styles.
Apparel sales were down slightly, again affected by Europe, while the solid trends in accessories at double digits were not enough to fully offset the decline in shoes and apparel. All in all, the weak top line, combined with adverse FX movements, particularly on the Japanese yen, and intensified promotional activities, had a negative impact on gross margin, down 250 basis points in the first half. Despite the decrease in operating expenses, primarily resulting from the far-reaching transformation plan initiatives implemented since last year, Puma's EBIT margin declined by 210 basis points in the first half. To wrap up on my comments, here is, on slide 14, a brief overview of Kering's H1 financial performance. Kering posted a solid performance in the first half. Consolidated group sales were up 4% comparable, and EBIT margin reached a new high at 18.0%.
Moving on to the remaining lines of the P&L, summarized here on slide 15. Other non-recurring operating income and expenses amounting to EUR 25 million primarily encompass various asset depreciations as well as restructuring charges across our luxury and sport and lifestyle divisions. Net financial charges amounted to EUR 97 million, a EUR 4 million drop from last year. Within this, the cost of net financial debt was down 18% year-on-year, chiefly reflecting the lower total debt outstanding compared to H1 last year. Average cost of debt also went down. The corporate tax rate amounted to 19.0% in the first half. The lower tax rate primarily reflects the greater weight of our luxury division in total group profit before tax. Conversely, the relative contribution of Puma and Volcom, both of which carry higher tax rates, was lower. Equity income from affiliates was close to nil this year.
As a reminder, it still included CFL last year. Net income from discontinued operations amounted to a charge of EUR 388 million this year. This includes several charges, such as the net capital loss arising from the Fnac demerger for EUR 262 million, together with EUR 111 million of residual asset depreciations at Redcats. Excluding discontinued activities as well as non-current items, consolidated net income is up 4%. Let's now have a quick look at slide 16, which highlights the evolution of our free cash flow from operations. Our free cash flow improved by a strong 14% to nearly EUR 400 million. This has been achieved thanks to positive contribution from the change in working capital and despite higher luxury CapEx, as well as financing of Puma's transformation plan. Net operating investments were up 37%, primarily stemming from higher luxury CapEx to fuel the development of each of our brands.
This was more than offset by a EUR 116 million drop in working capital. On slide 17, you will find the change in our net financial position during the period. In the first half, net financial debt increased compared to December last year. This primarily reflects usual seasonality patterns, including the payment of our dividend in the first half, which this year has represented a cash outflow of close to EUR 500 million. This increase in net debt also reflects several acquisitions completed in the first half, namely Qeelin, Christopher Kane, France Croco, and Richard Ginori, together with cash outflows stemming from the demerger of Fnac and its track capitalization prior to its listing for around EUR 350 million. It also includes purchases of treasury shares to fund part of the Pomellato acquisition. This was partly offset by proceeds from several Redcats disposals, net of outstanding cash balance.
This now ends my remarks. Let me now pass the phone back to Jean-François before we take your questions.
Thank you, Jean-Marc. We are now on slide 19. In conclusion, we had a very good first half in luxury, illustrating the benefits of our strong geographic mix between mature and growing countries. In sport and lifestyle, as expected, we face a challenging year. We continued to boost the operating profitability and bottom line of our continuing operations and generated significant cash flow from operations. What do we see for the balance of the year? In four words, more of the same. We expect the trends of the first half to continue for our luxury goods activities, with continued healthy momentum in profitability. In sport and lifestyle, we do not foresee any short-term turnaround in revenue or gross margin trends.
We will hold the line on operating expenses and strive to maintain adequate profitability while the new management team works on the refocusing and relaunch of the Puma brand. Bjørn started just a few weeks ago, it would be premature to expect a detailed plan. He will address five main priorities we have started working on since the beginning of the year. One, further strengthen and focus the brand's positioning, anchoring it on sport and performance. Two, reinvigorate design and tighten the development of both products and collections. Three, intensify the brand's product and marketing uniqueness through better and more coherent storytelling. Four, establish a sales organization that focuses squarely on sell-through. Five, continue to simplify the organization, accelerate processes, as well as time to market, and renew support structures, notably IT and supply chain.
We know that it would take time to complete this transformation and to bring Puma to the top again. Given the outstanding power of this brand and its unique assets, we are sure that Puma will be successful. At Puma, as well as in all our activities, we are ready to take the time it takes to build our businesses for long-term, sustained performance and profitability. We will rebuild Puma as a powerhouse in itself, as well as the center of our sport and lifestyle division. The striking success of our designer brands alongside Gucci and all the larger luxury houses clearly validates these strategic choices. The designer brand we hope to grow substantially is Christopher Kane. As you have seen, we have asked Alexandre de Brettes, whom you all know, to become its CEO.
We are sure that Alexandre's expertise acquired as group head of investor relations over the past years will ensure a successful move to an operational role and accelerate this brand's expansion. We are close to finalizing the recruitment of a successor to Alexandre, who, with the support of Edouard Crowley, will ensure the transition, and we hope to make an announcement in the coming weeks. This sums up our introductory remarks, and we are ready to answer your questions. Operator?
Thank you. Ladies and gentlemen, if you wish to ask a question, please press the star or asterisk key followed by the digit one on your telephone keypad at this time. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. Once again, if you wish to ask a question, please press star one. We will now pause for just a moment to allow everybody to signal. We will now take our first question from Thomas Chauvet from Citigroup. Please go ahead.
Good evening, Jean-François and Jean-Marc. Three question, please. The first one on Puma. You've given five initiatives. Will that require additional restructuring charges, or is it just the reformulation of the existing strategy? Secondly, in your release, you seem pretty confident about the second half. In luxury, of course. Can you comment perhaps on whether July trends have improved further, whether the margin development at Gucci and BV is sustainable in the second half? How much of that was really driven by FX? Thirdly, just a question on your geographic trends for the Gucci brand, which look pretty good, except Asia. Also tell us what initiatives you're taking to return to growth there. Thank you.
Good afternoon. About Puma and the initiative that I mentioned, Bjørn is now preparing for his roadmap. So this new roadmap will encompass a detailed action plan. Depending on that, we will consider if this requires restructuring. At this point of time, no restructuring cost is anticipated.
Hello, Thomas. Concerning the July trends, you know that we generally don't comment our current trading, especially also because this is the Ramadan period, and probably it's not totally comparable to last year. What we can tell is that in the second quarter, there was a real acceleration in the sales growth for all the brands and for the two different channels, meaning retail and wholesale. It was not fueled by FX, because when you look at comparable growth, you see clearly an acceleration in the Luxury Division for all the brands and especially all the brands. About Gucci and the geographical trends. What we can say is that, in fact, there was clearly an acceleration for Gucci in the second quarter in Europe, and the business in Europe is really good.
Fueled both by local demand and by tourist flow, which are clearly better than during the first quarter. In North America, despite the headwinds in Hawaii, the performance of Gucci is still very solid, both in retail and in wholesale. In Japan, the pace of growth was better in the second quarter after a very solid first quarter. Still in APAC, there is a negative trend in Taiwan and still in Korea, the situation is a little bit better. In Singapore, we were hit by the strong SGD. In China, the trends are still positive, but there is clearly a slowdown on the Chinese market.
Thank you, Jean-Marc. Just on my comments, my second question was more on the margin development that Gucci and BV supported by FX. Could you tell us what was the impact and how should we think about the second half in terms of margin development at these two brands, which show great progress in H1?
Okay. Sorry, I didn't hear your question about that. In fact, of course, the performance margin was helped by the FX. At Gucci, what is notable is the fact that the gross margin on a constant currency basis increased, meaning it will validate the strategy of upgrading the brands. We had negative impact of store openings. At the end of the day, on a constant currency basis, there is a slight decrease of the EBIT margin for both Gucci and Bottega Veneta. This impact of the store openings should be less significant during the second half. For the year, we still expect an increase of the EBIT margin, which was the target we had at the beginning of this year.
Thank you.
Thank you. We will now take our next question. From Warwick Okines of Deutsche Bank. Please go ahead.
Yeah. Good evening, Jean-François, Jean-Marc. Just a couple of questions again on the Gucci brand, please. Could you comment on the performance in mainland China? Was that positive, or was it greater China overall that was positive? Secondly, could you actually elaborate what the constant FX EBIT margin at Gucci would've been? Is it just down a few basis points or something more significant? Thank you.
As you mentioned about our luxury brand, and especially Gucci, in fact, the trends were quite good in Hong Kong, and also in mainland China. This is positive in these two areas. Clearly, we saw, especially during the first quarter, but also in the second quarter, that part of the tourist flow, which slowed down in Europe, we find this Chinese tourist flow again in Hong Kong. Globally, for Gucci, the growth over the first half was more or less comparable between mainland China and Greater China. It's positive for the full first half, both in China and mainland China and Greater China. Concerning about the EBIT margin, yes, we don't disclose exactly the figure, but it's a question of a few basis points of decrease of the EBIT margin on a constant currency basis.
Thank you very much. Just actually just as a follow-up to my first question on China, clearly the Asia-Pac performance between Q1, which I think was +3%, turned around into -4% in Q2, against very similar comps. Was the deterioration then basically entirely due to Singapore, Taiwan, and Korea?
Singapore was a particularly negative impact. We had also some adverse conditions for business in Vietnam also, partly. It's a one-off effect in Vietnam. Globally, it's mainly Singapore, Taiwan, and Vietnam explaining the downtrend in Asia-Pac. Plus an effect for all the brands, all the luxury brands in Guam, due to the decline of traffic of the Japanese tourists.
Great. Thank you very much.
Thank you. We will now take our next question from Antoine Belge of HSBC. Please go ahead.
Hi, it's Antoine Belge at HSBC. First of all, congratulations to Alexandre. Three questions.
Thank you.
First of all, within the very strong performance of Gucci in Western Europe, which obviously includes Italy, what about the streamlining of distribution there? Is that cleaning of the distribution now over, which explained part of the acceleration in Europe? Second question, back to this sort of weak market in China. Have you noticed any big difference in trends between more of the logo product versus non-logo? Finally, on YSL, should we expect a margin deterioration over the full year i.e. continued investment in the second half? Thank you.
In Europe, yes. In fact, the decrease in wholesale figures in the Q1 was quite strong. It was less significant in the second quarter also due to the comp because we had already cleaned up the wholesale channel in the Q1 and in the Q2 of last year, especially in Italy. Also, I think that there is clearly a rebound of the tourist flow in Europe during the second quarter. According to me, they explain mainly the trends in Europe. It's about this rebound of tourist flow and also acquired a sustained growth of the local clientele, probably better than during the Q1. About logo and non-logo in China.
Clearly, in the performance of Gucci in China, there is more or less what we had to face in some other Asian country or more mature country when we decided to upscale the brand with more non-logo products and plain leather products. Clearly, there is a decrease of traffic. In China, there is globally, I think, an issue with the traffic in the luxury brand stores, plus this effect of upscaling the brand. Clearly, we have lost some clientele. What we can say is that we have a double-digit increase in non-logo sales in China. I have just, for example, the figures of the Q1. Q1 2013 compared to Q1 2012, we have increased the share of non-logo product in handbags of +14%, meaning it was about one-fifth of the sales one year ago.
It's now more than one-third of the sales in China. I think it does clearly validate this strategy of upscaling the brand, but we have still an issue with the traffic. For YSL, we have said already that it would be a year of investment with new stores and more communication around the brand. We can expect a decrease. It's part of the brand build-up together with the move made by [this demand] with the brand and the design. We should have a decrease of the EBIT margin this year, probably the same proportion we had during the first half. What I can tell you is that the fashion division will be profitable, whatever.
I think that considering the size of investments we have decided to dedicate to this brand, I think that the decrease of EBIT margin is contained, and we are careful about the containment of store expense and global expense increase. We try just to find the right balance between necessary investments and not increasing too much the operating expenses.
Okay, thank you. Maybe just a clarification on the Gucci brand. You said +6% for retail versus +4% in total. Retail was what? Down low single digits on a worldwide basis, something like that?
On Gucci, it was a minus 4% on the first half on wholesale. Also partly explained due to the rationalization, including the fact that we have taken directly the management of some duty-free stores in Korea. We have also some new doors previously in the wholesale channel in North America, plus the fact that we have decreased the wholesale channel in Europe. It's a minus 4 over the first half and minus 5 during the second quarter.
Thank you very much.
Thank you. As a reminder, ladies and gentlemen, if you wish to ask a question, please press star one. We will now take our next question from Matthias Seifert of Nomura. Please go ahead.
Hi, this is Matthias Seifert from Nomura. First question, maybe follow on Gucci, what you just said about the stores. You had quite a few net additions in the second quarter. Was that related to the takeover of these shops you just mentioned? What can we expect for the remainder of the year in terms of net store additions? Second question would be, just quickly on Puma. Have you increased your stake in Puma in the second quarter, or is it still at around 83%? That would be my questions.
Okay. Absolutely. We have 17 new directly operated stores at Gucci, among which approximately 11 corresponding to transfer from the wholesale channel. This is a net addition of six new stores. This is a net between opening and closing. We had initial targets in our forecast of around 30 net openings in the year, among which something like 15-20 transfer of wholesale stores. It's a quite moderate ambition in terms of opening this year for Gucci, which is fully consistent with our decision to rationalize not only the wholesale channel but also our store footprint in order to improve the profitability of our stores and also to improve the exclusivity for the brand. Concerning your question about Puma, neither Kering nor Puma bought any share of Puma in the first half of this year.
Okay, thank you.
Thank you. Our next question comes from Catherine Rolland of Kepler Cheuvreux. Please go ahead.
Thank you. Good evening. I have two questions actually. First of all, a follow-up question regarding Gucci in Europe. Could you tell us what was the retail sales trend in Q2 at Gucci in Europe and the wholesale also? The second question is about the overall trend of Gucci sales to Chinese and Japanese customers. Could you give us some color about these trends in H1, also could you remind us what is the % of Gucci sales dedicated to the Chinese and the Japanese customers at the end of H1, please? Thank you.
Good evening, Catherine. The increase of sales for Gucci globally in Europe was + almost 10% during the quarter, for both the retail channel and the wholesale channel, so the global figure. In retail, the trend for Europe was also positive and in wholesale, too. Not in wholesale, sorry, because it's still in accordance with our rationalization of the wholesale channel. It was + almost 10% for Gucci in Europe during the second quarter.
Okay.
Sorry?
Sorry. Could you give us maybe a bit more color about the trend in retail sales, especially?
Concerning that we are still rationalizing the wholesale channel, which is self-inflicted. You can imagine that the retail trends are globally consistent with this total figure for Gucci.
Okay.
About the weight of the Chinese customers and the Japanese customers. It was positive for the Japanese cluster. In fact, globally, it was very positive on the Japanese domestic market. Worldwide, it's still positive, showing this improvement in the Japanese consumption globally. It's slightly positive for the Chinese cluster, with a positive trend in Europe and a quite flat trend in APAC region. If you look at the Chinese clientele as a total of sales for Gucci during the second quarter, it was something like 40% for Gucci. The Japanese customers, it was slightly above 10%, if I'm correct.
Okay. Thank you very much.
Thank you. Our next question comes from Louise Singlehurst of Morgan Stanley. Please go ahead.
Hi. Good afternoon, gentlemen. Two questions from me, please. Just going back to the space growth on Gucci. I think you said the 446 stores there are today. Can you just talk us through the longer-term expectations? How many more stores that we can expect over a medium term, certainly beyond 2013? Secondly, just unrelated, can you just tell us a bit of an update on La Redoute and just remind us of your criteria for acquisitions and whether Loro Piana was something that you may have looked at, or whether that would have been too large? Thank you.
About the store footprint, Louise. As I mentioned before, we have quite modest ambitions this year for Gucci, considering that, as I said, we plan to open in fact 10 to 15 new doors, the other ones being the transfer from wholesale existing point of sales. We don't disclose any forecast for the coming years because we are more focused on improving the quality of our stores. We have a part of our CapEx dedicated to refurbishment, and it's really key for Gucci brand. We have almost 50%-60% of our stores with the latest concept, which is a very important concept for Gucci because it's quite a flexible concept, allowing us to change very rapidly in the shelves in order to better work with our assortments and to be very flexible in terms of replenishment of the stores.
We believe now it's more a question of consolidation of our stores footprint for Gucci. Concerning La Redoute, the process is running at full speed now, so we are having discussions with potential buyers. Nothing will happen before the month of September or even October. Considering Loro Piana, Loro Piana is a fabulous brand, but a transaction of this size is not part of our strategy.
Super, thank you.
Thank you. We will now take our next question from Mario Ortelli of Bernstein. Please go ahead. Please go ahead, Mr. Mario Ortelli, your line is open.
Good afternoon. Two questions from me. The first one is about investment, a guideline for the remaining part of the year, and the second question is about working capital. We have seen in the first half a significant improvement. I kindly ask you the reason of this improvement and what is the guideline for the second half of the year.
For your two questions, as you perfectly know, we don't provide any guidelines about both working cap or other financial indicators. I can just say that about capital expenditures, we had said that we would help our brands to grow again this year with store openings for some of the brands like Bottega, like Yves Saint Laurent, and the other brands. We'll continue during the second half, and also very important investments in terms of information system in order to track better our clients, and we will still invest in that. It's what I can tell you about the capital expenditures. About the improvement of your working capital.
First, it's approximately EUR 120 million now of improvement, among which EUR 30 million relating to inventory, thanks to a better efficiency in inventory management and a tighter monitoring of orders placed to suppliers and a new strategy in terms of replenishment and follow-up of the needs of our different stores in the network. The other important part is payables and other working capital items. It's partly due to the fact that there is a decrease of business at Puma level, it's part of the explanation, and also because in 2012, we had an acceleration of payments to our suppliers, especially at Puma, and we have not yet this situation. We have no more this situation for this year.
Thank you.
We will take one final question.
Certainly. Our last question comes from Rogerio Fujimori of Credit Suisse. Please go ahead.
Hi. Thank you for taking my question. Just one question about Gucci. Could you give us some color on how gross margin progressed and also the trends in OpEx and in particular, marketing investment as a percentage of sales during the first half, at least qualitatively? Just to follow up, what has been the contribution from e-commerce for Gucci growth in the half? Thank you very much.
As I said before, there was an improvement of the gross margin, analyzed not only as reported figures, but also if you look on a constant currency basis. It is again, due to this improvement of the product mix and this move towards more sophisticated goods with higher gross margin. In terms of marketing, the other operating expenses were globally under control, and we had only two lines of operating expenses, which accelerated more than the revenue. We have the store expenses and we have the IT. Again, due to this rule, we have to improve our systems to better follow up our customers, especially in terms of customer relation management and also to track the performance of our different stores to be better in the assortment. Globally, the other OpEx increase is below the increase of the sales. In terms of marketing expenses, until now it was stable.
As you know, we could later reinvest part of the gains of the gross margin in marketing expenses. It was not the case during the first half. Yes, about the e-commerce. Yes, we had globally, in the second quarter, e-commerce revenue grew by 28%, which was a very positive performance over the first half, it is more than 30%. Just to give you some more colors about this performance, the U.S.A. are still the first market with about 70% of total e-commerce revenue. Europe is growing fast now reaching a share of 21% of revenue. Japan, Korea, and Australia are very dynamic e-commerce markets in effect, having something like 9% of revenue in e-commerce.
Thank you very much.
Thank you very much for your questions and interest in our performance. We look forward to talking with you in the coming months, and we wish you an excellent summer. Good evening and have a good day for those in the U.S.