Home > Culture > Life & Style

Kering dragged down by Gucci sales slump as group seeks new designer

Published: 11 Feb. 2025, 17:10

The logo of fashion house Gucci is seen outside a store in Cannes, France, May 16, 2024. [REUTERS/YONHAP]

French luxury group Kering reported a 12 percent drop in fourth quarter sales on Tuesday, dragged lower by its Italian brand Gucci, but flagged a slight improvement in major markets China and the United States.

The French conglomerate, which sacked Gucci designer Sabato de Sarno last week as part of its efforts to revive the label, said sales over the last three months of the year were 4.39 billion euros ($4.52 billion), down 12 percent on a comparable basis in line with expectations, according to a Visible Alpha consensus cited by UBS.

Sales at Gucci, which account for nearly half of the group's sales and about two thirds of recurring operating profit, were down 24 percent, below analyst expectations for a 19 percent drop, as the label's aesthetic overhaul failed to win back shoppers.

Kering's efforts to turn around Gucci with a new, minimalist design approach from De Sarno, who took up the position two years ago, were complicated by a global slump in luxury demand.

The industry's sales rate is the slowest in years, and consultancy Bain & Company estimated they fell globally 2 percent last year, weighed down by a property crisis in China — a major market for Gucci.

Finance chief Armelle Poulou told reporters the company saw improvement of sales in mainland China and with Chinese shoppers, as well as in the U.S.

"As far as China is concerned, we saw a sequential improvement in our sales of 6 points between Q3 and Q4," she said.

In a statement, Kering CEO Francois-Henri Pinault said the company has reached a "point of stabilization, from which we will gradually resume growth".

Full year recurring income from operations came to 2.6 billion euros, slightly higher than Kering's guidance in October for 2.5 billion euros.

Reuters