Kering, the luxury conglomerate owning Gucci and other prestigious brands, is facing a significant sales decline.
- Gucci experienced a pronounced 18% decrease in revenue in the first half of 2024, with notable underperformance in its retail sector.
- The group’s total revenue fell by 11% for the first half of 2024, a trend mirrored across most of its prominent brands.
- Efforts are underway by Kering to adapt to the market conditions and aim for future growth despite current challenges.
- CEO François-Henri Pinault remains firm in the approach of long-term value creation amidst the existing profitability pressures.
Kering, the French luxury group known for its portfolio of high-end brands, reported a stark decline in sales for the first half of 2024. Operating income also saw a substantial drop of 42%, amounting to €1.6 billion. The company warned of a potential further decline in the second half, up to 30% compared to last year. This underlines the substantial impact of challenging market conditions on its financial performance.
Gucci, one of Kering’s flagship brands, reported an 18% fall in revenue over the first half of 2024, with the second quarter showing a 19% decline. The sharpest drop was observed in the directly operated retail network, which suffered a 20% reduction in sales. Such figures point to significant difficulties within the luxury retail environment, particularly across the Asia-Pacific region where store traffic has notably decreased.
Saint Laurent experienced a 9% decrease in sales during the same period, reflecting the broader challenges within the luxury segment. However, not all brands under the Kering umbrella were negatively affected. Bottega Veneta, for instance, witnessed an 8% increase in its direct retail operations, despite a 19% dip in wholesale revenue, indicating potential resilience or strategic shifts in certain areas.
Kering’s CEO, François-Henri Pinault, highlighted the company’s strategic focus on maintaining long-term value creation through targeted investments in brand enhancement and exclusive distribution. He acknowledged the pressure placed on profitability by the current market environment, stating that every investment is geared towards reinforcing the brand’s future positioning. While the pace of execution may be affected, the overarching strategy remains firmly oriented towards sustainable growth.
Kering is navigating challenging market conditions with strategic efforts aimed at long-term growth despite current revenue declines.
