PARIS (AFP) – French luxury giant Kering said on Tuesday it is anticipating a 10-per-cent drop in year-on-year sales in the first quarter due to a decline in the performance of its flagship brand, handbag-maker Gucci.
“This performance primarily reflects a steeper sales drop at Gucci, notably in the Asia-Pacific region. Gucci comparable revenues in the first quarter are expected to be down by nearly 20 per cent year on year,” the luxury group said in a statement.
Kering, whose other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta, will publish its first quarter sales on April 23 after the stock exchange closes.
In February, Kering chief executive officer (CEO) Francois-Henri Pinault vowed to press on with a strategy to put Gucci “back on track” after Kering announced a 17-per-cent fall in net profits in 2023.
However, Pinault warned that it “won’t happen overnight.”
At Gucci, a brand famous for its leather handbags that account for half of Kering’s revenue, sales dropped six per cent to EUR9.9 billion in 2023.
Kering changed Gucci’s top management last year, appointing deputy CEO and Pinault confidant Jean-Francois Palus to replace Marco Bizzarri, who had led the brand since 2015.
Sabato de Sarno succeeded Alessandro Michele as the brand’s creative director in January 2023 and the first items of his “Ancora” collection were made available in select stores in mid-February.
The collection has been met with a “highly favourable reception”, Kering’s statement said.