Sales slump at Gucci owner Kering
Shares in Gucci owner Kering fell on Wednesday after it reported a decline in third-quarter revenue, citing softening demand.
In results released after the close on Tuesday, Kering said revenue dropped to €4.46bn - down 13% as reported and 9% on a comparable basis.
Gucci sales fell 14% as reported during the quarter, or 7% on a comparable basis to €2.2bn, while sales at Yves Saint Laurent declined 16%, or 12% to €768m. Sales at Bottega Veneta were down 13% as reported to €381m, or 7% on a comparable basis.
Chairman and chief executive François-Henri Pinault said: "Beyond the challenging macroeconomic conditions and softening demand across the luxury industry, the change in our revenue performance in the third quarter reflects the impact of our decisions to further elevate our brands and their distribution.
"The organisation we put in place in July will enable us to strengthen the steering of our Houses in the current market environment and to reclaim our positions and influence. With the acquisition of Creed completed last week, one of the world’s most distinguished high fragrance houses has joined our family, propelling our ambitions in beauty onto the next stage."
At 0910 BST, the shares were down 3.9% at €391.45.
Victoria Scholar, head of investment at Interactive Investor, said: "While Gucci has been extremely popular in recent years, like all fashion trends, they come and go, and the fickle fashionistas have been moving beyond Gucci lately in the hunt for the latest hot brand, weighing on Gucci’s sales.
"Once a luxury brand’s proliferation becomes too widespread, it loses its allure and demand can quickly fade. CEO Jean-Marc Duplaix said he’s trying to shift the brand to become more upmarket once again. Gucci appointed a new creative director this year to try to kick start a revival and change in direction.
"Kering’s quarterly performance echoes that of LVMH with both luxury brands grappling with weakness in demand amid the sluggish global growth backdrop with a softening consumer stateside and as China’s post-covid release of pent-up demand fades. Whie luxury was certainly the place to be for investors at the start of the year, the sector’s allure has been fading with shares in Kering shedding over 30% in the past six months and LVMH down over 20%."