Kering, the Paris-based parent company of Gucci, anticipates a 20% decline in sales for the luxury fashion brand in the first quarter, primarily attributed to a slowdown in Asia. This cautionary outlook contrasts with the resilient sales reported by competitors LVMH and Hermès.
Although the luxury market has experienced growth over the past decade, recent years have seen a moderation in sales performance. Gucci, which heavily relies on China for over a third of its sales, has been particularly affected by the economic challenges facing the region.
Kering highlighted that the anticipated profit warning is primarily driven by a significant sales decrease at Gucci, especially notable in the Asia-Pacific region.
The company is set to announce its financial results on April 23.
Gucci remains a key contributor to Kering’s portfolio, alongside other prestigious brands like Yves Saint Laurent, Balenciaga, and Bottega Veneta.
In contrast to Kering’s performance, LVMH, the parent company of luxury labels like Louis Vuitton, Moët & Chandon, and Hennessy, reported stronger-than-expected sales for the previous year.
Similarly, Hermès celebrated record annual sales in 2023 and announced plans to reward all its employees worldwide with bonuses.
Despite the resilience demonstrated by its competitors, Gucci, known for its appeal to younger, aspirational consumers, may face greater vulnerability to economic fluctuations.
Last year, Kering initiated leadership changes at Gucci, appointing Jean-François Palus as CEO and Sabato De Sarno as creative director.
The Ancora collection, the first under De Sarno’s creative direction, received a positive reception upon its mid-February release, signaling the potential for rejuvenation in Gucci’s offerings.
