GUCCI quarterly sales tumbled as Kering’s biggest label struggles to emerge from an extended demand downturn.
Revenue at Gucci fell 24 per cent on a comparable basis in the fourth quarter, Kering said on Tuesday (Feb 11) in a statement. Analysts had expected a slide of 22 per cent.
In the latest sign of turmoil at the ailing brand, Kering last week announced the departure of Gucci’s designer, Sabato De Sarno, after just two years in the job. Brought in to reignite the popularity of the Italian label, De Sarno’s creations failed to catch on. The change marks one of the first major decisions taken by Gucci’s new chief executive officer, Stefano Cantino, who took over that role in early January.
A broader slowdown in demand for pricey bags and clothes has also hurt the performance of Kering rivals including LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury group. Hermes International SCA, considered one of the most resilient purveyors of high-end goods because of its loyal, wealthy clientele, will report earnings on Friday.
Kering’s annual recurring operating income fell 46 per cent to 2.6 billion euros (S$3.6 billion) last year, the French fashion group said, the lowest since 2016. Gucci accounted for almost two-thirds of profit in the period.
The company saw a slight improvement in trends in China and North America between the third and fourth quarters, even though China remained negative, chief financial officer Armelle Poulou told reporters on a call. Kering is seeking to keep costs under control by implementing a headcount freeze as well as supply chain cost reductions, she said.
She also reiterated that Kering planned to do more deals with funds to reduce its exposure to property assets and lower its debt after selling a stake in some of its Paris real estate holdings to French private equity firm Ardian last month.
Poulou declined to say when Kering planned to name a new Gucci designer. De Sarno’s creations were more minimalist than his predecessor’s flamboyant designs and failed to generate much buzz around the label. In recent decades, Gucci has tended to fare better under artistic directors who’ve pushed bolder creations.
Paris-based Kering’s shares have risen 2.5 per cent this year, but remain down about 70 per cent from their peak in 2021. LVMH has advanced about 8 per cent in 2025, and Hermes 18 per cent. BLOOMBERG
