Kering, the prestigious French luxury conglomerate and the parent company of renowned fashion powerhouse Gucci, has reported a significant downturn in its financial performance for the past fiscal year. This decline is predominantly attributed to the lackluster sales in the crucial Chinese market, which has historically been a substantial contributor to the luxury sector’s growth. The company’s net profit experienced a drastic reduction, plummeting by 62% and settling at 1.1 billion euros. This is a stark contrast to the substantial 3 billion euros recorded in 2023, marking a substantial setback for the company.
The overall revenue of the group also witnessed a downturn, decreasing by 12% to reach 17.2 billion euros. Among the brands within its portfolio, Gucci, which serves as Kering’s flagship brand, experienced a significant sales slump, with a decrease of 23%. This decline is indicative of the broader challenges the luxury retailer is facing in the current economic climate. The luxury market, particularly in China, has been affected by various external factors, including economic slowdowns and shifts in consumer spending patterns, which have all contributed to this downturn.
Kering boasts a rich portfolio that extends beyond Gucci, including other eminent names such as Saint Laurent, Balenciaga, Alexander McQueen, and Bottega Veneta. In light of these financial difficulties, Kering’s CEO, François-Henri Pinault, expressed in a statement the challenging nature of the past year, underscoring the impact of these external market conditions on the company’s performance.
Compounding the difficulties faced by the company this year, Gucci recently saw a significant change in its leadership. The brand parted ways with its creative director, Sabato De Sarno. The Italian designer, who was appointed in 2023 with the intent to rejuvenate Gucci’s brand appeal, served in this capacity for approximately two years. His departure marks another pivotal moment for Gucci as it continues to navigate these challenging times while striving to maintain its position as a leader in the luxury fashion industry.