Slowdown impacts Gucci, sales expected to fall by 20%

New Delhi: Slowdown in Asia is beginning to impact Gucci sales which are expected to fall by 20% in the first quarter, according to its Paris-based owner Kering.

On the other hand, sales of the rivals LVMH and Hermes have been resilient.

Gucci gets more than a third of its sales from China. Presently, the Chinese economy is going through a tough phase which is leaving its impact on the world trade and sales figures.

In the past decade, the luxury market has grown but the sales have not seen the matching growth in recent years.

Gucci accounted for two-thirds of the group’s operating income last year, reports BBC. Kering’s other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta.

Kering’s net profit last year fell by 17%. Its shares have also seen a downward trend and lost 23% value over the past year. Its rival LVMH posted higher-than-expected sales for 2023.

Gucci appeals to younger and aspirational shoppers. The economic pressure and market conditions first impact this group which to an extent explains the slump in its sales.

Gucci’s top management was changed last year by Kering.