Gucci Revenue Dives by 25%, Kering Warns of Weakest Annual Profit in Years
As the global luxury slowdown continues to choke sales at the biggest luxury labels.
The sector-wide luxury slowdown continues to claim more victims as French luxury conglomerate Kering warned that profits may post even lower than the already poor forecast due to declining performance at its flagship brand Gucci.
Kering’s third-quarter report showed that Gucci’s revenue tanked by 25% year-over-year, contributing to the overall 16% sales drop across Kering’s brand portfolio. Its second-largest brand, Saint Laurent reported a 12% sales drop, while sales at the rest of the company’s brands including Balenciaga, McQueen, and Boucheron also reported poor performance.
As reported by Business of Fashion, Kering said it expects “major uncertainties likely to weigh on demand among luxury consumers in the coming months.” The luxury slowdown has largely been driven by waning demand in key markets in the Asia-Pacific region, particularly in China, where spending has decreased dramatically.
The news comes no more than a week after competitor LVMH posted a 16% decline in third-quarter sales, which led to share value falling by as low as 7%. Even as luxury players employ strategic adjustments like store closures and creative changes, such tactics remain at the mercy of consumer confidence and the broader state of the global economy.
Stay tuned to Hypebeast for the latest developments in the industry’s luxury slowdown.
