Gucci Sales Plunge as Kering Label Struggles to Revive Demand
Sales dropped 25% at Gucci on a comparable basis, Paris-based Kering said Wednesday. Analysts were expecting a 24% drop.
Kering, which also owns Yves Saint Laurent, Bottega Veneta and Balenciaga, gets more than 60% of its profit from Gucci, making a recovery at the ailing label crucial for the French group. The company, controlled by the billionaire Pinault family, last month tapped Demna Gvasalia — known as Demna — to be its next Gucci designer.
Demna spent a decade as Balenciaga's artistic director, overseeing strong growth with attention-getting looks such as the Triple S sneakers, recognizable by their exaggerated size. But Gucci is a much bigger brand, and moving on to a new designer for the second time in about two years means any turnaround will take time.
'Demna is part of the group, he's already working with the teams at Gucci,' Chief Financial Officer Armelle Poulou said on a call with reporters, declining to confirm when he will unveil his debut collection for the label.
Kering shares have declined 50% in the past year, a worse performance than rivals Richemont, Hermes and LVMH.
Beyond Kering's internal issues, the broader luxury market is stuck in a period of weak growth caused in part by Chinese shoppers reining in purchases. US tariffs and an escalating trade war have further darkened the outlook for the industry.
Kering has 'capacity to protect its margins through price increases' in the US, Poulou said, adding that the group is still analyzing the initial tariff announcements.
Even the more resilient luxury groups, such as LVMH Moët Hennessy Louis Vuitton SE and Hermès International SCA, recently posted disappointing results. Overall, Kering sales fell 14% in the first quarter.
More stories like this are available on bloomberg.com
First Published: 23 Apr 2025, 09:34 PM IST
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