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Business Times
12 hours ago
- Business
- Business Times
Gucci owner Kering posts 46% profit slump before new CEO arrives
[PARIS] French luxury group Kering reported on Tuesday a 46 per cent plunge in net profit during the first half, with sales slumping again at its flagship Gucci brand, as the group awaits a new CEO to try to regain its footing. Group net profit fell to 474 million euros (S$704.5 million) in the first half from 878 million in the same period last year, on sales that were down 16 per cent at 7.6 billion euros. Kering announced in June that it had poached Luca de Meo, then the head of French automaker Renault, to become chief executive and help turn around the company alongside Francois-Henri Pinault, who will remain board chairman. Pinault's family controls the holding company that is the largest shareholder in Kering, whose crosstown rival LVMH reported last week a 22 per cent drop in first-half profit. Luxury groups worldwide have been hit hard by slowing Chinese appetite for luxury goods and by US President Donald Trump's barrage of tariffs since returning to office this year, which could crimp demand in a North American market that represents a fourth of Kering's sales. 'Though the numbers we are reporting remain well below our potential, we are certain that our comprehensive efforts of the past two years have set healthy foundations for the next stages in Kering's development,' Pinault said in a statement. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Gucci remains the prize in Kering's stable of brands, generating 44 per cent of its sales and roughly two-thirds of its operating profit. But it has struggled to turn things around at the Italian fashion house famous for its handbags, and in March it wooed the Georgian designer Demna to take over as artistic director. Gucci's sales dropped 26 per cent in the first half to 3.03 billion euros, for an operating profit of 486 million euros - down 52 per cent. 'Vigilance' But investors may have to wait for a recovery plan from De Meo, who has yet to take up his post. 'The change in group management is positive, but earnings will remain under pressure in the short term,' analysts at HSBC said in a note before the earnings release. 'Luca de Meo will not take up his post until Sept 15, and it's unlikely that he will present his strategic plan before the publication of full-year results, expected in February 2026,' they said. Kering's two other top brands are also facing headwinds, with Yves Saint Laurent sales falling 11 per cent in the first half to 1.29 billion euros, and Bottega Veneta sales up just one per cent at 846 million euros. Kering must also contend with a debt load that stood at 9.5 billion euros at the end of June, the result of acquisitions and investments in recent years. It bought a 30 per cent stake in Valentino, took over the beauty brand Creed, and opened stores on key but pricey sites in cities including Paris and Milan. 'Selling this real estate (below the purchase cost) is a bitter but necessary solution,' analysts at Bernstein wrote ahead of the earnings statement. Kering said it was 'stepping up the initiatives needed to support the development and growth of its houses, while implementing with determination the efforts required to increase its efficiency'. 'These actions imply particular vigilance with regards to financial discipline,' it added. AFP
Fashion Network
14 hours ago
- Business
- Fashion Network
Gucci owner Kering posts 46% profit slump before new CEO arrives
French luxury group Kering reported Tuesday a 46 percent plunge in net profit during the first half, with sales slumping again at its flagship Gucci brand, as the group awaits a new CEO to try to regain its footing. See catwalk Group net profit fell to 474 million euros ($547 million) in the first half from 878 million in the same period last year, on sales that were down 16 percent at 7.6 billion euros. Kering announced in June that it had poached Luca de Meo, then the head of French automaker Renault, to become chief executive and help turn around the company alongside Francois-Henri Pinault, who will remain board chairman. Pinault's family controls the holding company that is the largest shareholder in Kering, whose crosstown rival LVMH reported last week a 22 percent drop in first-half profit. Luxury groups worldwide have been hit hard by slowing Chinese appetite for luxury goods and by US President Donald Trump 's barrage of tariffs since returning to office this year, which could crimp demand in a North American market that represents a fourth of Kering's sales. "Though the numbers we are reporting remain well below our potential, we are certain that our comprehensive efforts of the past two years have set healthy foundations for the next stages in Kering's development," Pinault said in a statement. Gucci remains the prize in Kering's stable of brands, generating 44 percent of its sales and roughly two-thirds of its operating profit. But it has struggled to turn things around at the Italian fashion house famous for its handbags, and in March it wooed the Georgian designer Demna to take over as artistic director. Gucci's sales dropped 26 percent in the first half to 3.03 billion euros, for an operating profit of 486 million euros -- down 52 percent. But investors may have to wait for a recovery plan from De Meo, who has yet to take up his post. "The change in group management is positive, but earnings will remain under pressure in the short term," analysts at HSBC said in a note before the earnings release. "Luca de Meo will not take up his post until September 15, and it's unlikely that he will present his strategic plan before the publication of full-year results, expected in February 2026," they said. Kering's two other top brands are also facing headwinds, with Yves Saint Laurent sales falling 11 percent in the first half to 1.29 billion euros, and Bottega Veneta sales up just one percent at 846 million euros. Kering must also contend with a debt load that stood at 9.5 billion euros at the end of June, the result of acquisitions and investments in recent years. It bought a 30 percent stake in Valentino, took over the beauty brand Creed, and opened stores on key but pricey sites in cities including Paris and Milan. "Selling this real estate (below the purchase cost) is a bitter but necessary solution," analysts at Bernstein wrote ahead of the earnings statement. Kering said it was "stepping up the initiatives needed to support the development and growth of its houses, while implementing with determination the efforts required to increase its efficiency". "These actions imply particular vigilance with regards to financial discipline," it added.
Asharq Al-Awsat
16 hours ago
- Business
- Asharq Al-Awsat
Kering's Quarterly Sales Weaker than Expected, Gucci Down 25%
Kering, the French group that owns fashion labels Gucci and Saint Laurent, reported on Tuesday a 15% drop in quarterly revenues, falling short of market expectations as the luxury sector grapples with a prolonged slump. Sales in the second quarter totaled 3.7 billion euros ($4.3 billion), down 15% on a comparable basis, missing a Visible Alpha consensus estimate among analysts for a 13% drop cited by UBS. Gucci, which accounts for the bulk of group profits, reported sales of 1.46 billion euros, down 25% year on year. Kering, whose shares have lost around 60% of their value over the last 24 months, has struggled with falling sales for over two years. Last month, it said it had hired former Renault CEO Luca de Meo as its next chief executive from September. A newly-agreed 15% tariff rate on all European Union exports to the United States, a key market where Kering makes over 20% of its sales, will add to headwinds. "The tariff impact is perfectly manageable for us," Armelle Poulou, Kering's finance chief, told journalists. Kering's brands, which also include smaller labels Bottega Veneta and Balenciaga, have already raised prices globally and more specifically in the United States, where Poulou said the company was taking a measured approach with a close eye on consumer sentiment. "There could be a second wave of price adjustments in the autumn," she said. The French group controlled by the billionaire Pinault family reduced its net debt in the first half of the year to 9.5 billion euros from 10.5 billion at the end of last year, largely due to real estate sales.
LeMonde
16 hours ago
- Automotive
- LeMonde
François Provost to head French carmaker Renault
It was an orderly succession. The board of directors at Renault is set to announce on Wednesday, July 30, that it has chosen François Provost, the company's current director of purchasing and institutional relations, to succeed Luca de Meo, who has left to join luxury giant Kering. Among the final candidates, the 57-year-old graduate of the prestigious École Polytechnique and engineer from the Corps des Mines, a body of French higher civil servants, was the closest to the former CEO, who reportedly prepared him to take over. "François Provost was the cornerstone of implementing the 'Renaulution' plan, especially the creation of the two subsidiaries Ampere [focused on electric vehicles] and Horse [specializing in hybrid combustion engines]," a Renault spokesperson said. He was the one who negotiated partnerships with Chinese automaker Geely, co-shareholder with Renault in the subsidiary dedicated to combustion engines and a partner of the group in South Korea and Brazil. He also worked on bringing Saudi oil giant Aramco into the capital of this entity. Provost alsp played a vital role in unraveling the capital ties with Nissan, Renault's former partner.
Fashion United
17 hours ago
- Business
- Fashion United
Luxury group Kering continues to tumble in first half, profit and sales plunge
Kering group, still weighed down by the difficulties of its flagship brand Gucci, announced on Tuesday a 46 percent plunge in its half-year net profit. This fell below 500 million euros. The new chief executive officer, Luca de Meo, is due to take office in mid-September to attempt to turn things around. Kering's turnover, owner of Yves Saint Laurent, Bottega Veneta and Balenciaga, fell by 16 percent over the six months to 7.6 billion euros. 'While the published results remain well below our potential, we are convinced that the efforts made over the past two years have laid solid foundations for the next stages of Kering's development,' said chairman and CEO François-Henri Pinault, quoted in the press release. The culmination of the reorganisation launched months ago to redress the brand and the group, Kering announced in mid-June the arrival of Luca de Meo. De Meo, former boss of car manufacturer Renault, will take on a newly created position of chief executive officer alongside Pinault. Pinault will retain the sole chairmanship. De Meo will take up his duties on 15 September. The group continues to face 'an economic and geopolitical environment that remains uncertain', the statement acknowledged. However, it displays its 'desire to sustainably pursue a path of profitable growth'. Meanwhile, profitability continued to suffer in the first half. The current operating margin fell to 12.8 percent, compared to 17.5 percent a year earlier in the same period. Kering group's main problem is that it is failing to revive sales of Gucci, its flagship Italian brand. Gucci alone accounts for nearly 50 percent of the group's sales and two-thirds of its operating profitability. These sales fell by 26 percent over the six months to three billion euros, compared to more than four billion euros a year earlier. In the second quarter, Gucci saw its sales fall by 27 percent to 1.46 billion euros. The group's other brands are not faring any better. Yves Saint Laurent's sales fell by 11 percent to 1.29 billion euros and those of 'other houses', a section that includes Balenciaga, by 15 percent to 1.46 billion euros. Only the woven handbag brand Bottega Veneta is holding its own, with a very slight one percent increase in sales to 846 million euros, as well as Kering Eyewear, the eyewear and beauty branch (plus two percent to one billion euros). Bottega Veneta handbag, SS25. Credits: ©Launchmetrics/spotlight This article was translated to English using an AI tool. FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@
