Anticipated 10% Sales Drop Expected at Kering Due to Gucci Decline

20 March 2024 1750
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The French luxury conglomerate Kering has forecasted a 10% year-on-year decrease in sales for the first quarter following a slump in performance by their leading brand, Gucci. This projection is largely attributed to a significant sales drop within Gucci, specifically in the Asia-Pacific region. The luxury group's statement stated that Gucci's benchmark revenues for the first quarter are estimated to be down by nearly 20 percent year on year.

Kering will reveal their first quarter sales on April 23 after the market closes. The conglomerate's roster also includes brands such as Yves Saint Laurent, Balenciaga, and Bottega Veneta. Despite a 17% decrease in net profits in 2023, Francois-Henri Pinault, CEO of Kering, pledged to continue implementing strategies aimed at reviving Gucci's performance. However, he cautioned that this is not a process that will yield immediate results.

One of the factors attributed to Kering's decline is a 6% fall in sales at Gucci, a brand renowned for its leather handbags, which contributes to half of Kering's earnings. In 2023, Gucci's sales dropped to 9.9 billion euros. Following this performance, Kering revamped Gucci's senior management with Jean-Francois Palus, a trusted associate of Pinault and deputy CEO of Kering replacing Marco Bizzarri, the former head of Gucci since 2015.

Sabato de Sarno took over from Alessandro Michele as the brand's creative director in January 2023, and by mid-February his 'Ancora' collection was available in selected stores. According to Kering's statement, the collection was greeted with a 'highly favourable reception' from customers.