Gucci parent Kering expects profits to plummet in first half of 2024. After a drop in sales in the first quarter, owner Pinault admits that the luxury group’s performance has deteriorated significantly.
45% lower profits
Kering, the parent company of luxury brands such as Gucci and Balenciaga, predicts that operating profit could fall by as much as 45% in the first half of the year compared to the same period last year. Performance worstened significantly in the first quarter, top executive François-Henri Pinault told the Financial Times.
Although the group had expected challenging starts to the year, weak market conditions, particularly in China, and the strategic repositioning of flagship Gucci added to the pressure on sales. In the first quarter, comparable sales slumped 10% to 4.5 billion euros and by as much as 19% at Gucci.
Upmarket
Main brand Gucci is on a turnaround under new creative leadership of designer Sabato de Sarno. He is to raise the label’s positioning to that of competitors like Hermès and Chanel, with a more timeless and minimalist look as well. His first designs are well received, but have only just hit shops.
However, sales also fell at Yves Saint Laurent, Balenciaga and Alexander McQueen. Only Italian fashion house Bottega Veneta and the group’s eyewear division saw growth. Only in the second half of the year Kering expects a better sales trend.
Stay up-to-date
Receive our free newsletters and do not miss out on the latest retail news.
Subscribe
Gucci parent Kering expects profits to plummet in first half of 2024. After a drop in sales in the first quarter, owner Pinault admits that the luxury group’s performance has deteriorated significantly.