Kering expects 45% decline after revenues “worsened considerably”

Luxury conglomerate Kering, which owns Gucci, Saint Laurent, Bottega Veneta and more, has announced that its revenue stood at £3.87 million (€4.504 million) during the first quarter, down by 11% year-on-year.

Revenue from the directly operated retail network fell 11% on a comparable basis and wholesale revenue was down 7% on a comparable basis, as the group "continues to strengthen the exclusivity of its Houses’ distribution".

Brand Breakdown:

• Gucci - revenue sat at £1.8 billion (€2.1 billion), down 21%.
• Yves Saint Laurent - revenue in the first quarter of 2024 amounted to £636 million (€740 million), down 8%.
• Bottega Veneta - revenue totalled £333 million (€388 million), down 2%.
• Other Houses - revenue totalled £708 million (€824 million) in the first quarter, down 7%.
• Kering Eyewear and Corporate - revenue amounted to £398 million (€463 million), up 8%.

François-Henri Pinault, Chairman and Chief Executive Officer. said: "Kering’s performance worsened considerably in the first quarter. While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline.

"In view of this revenue decline, together with our firm determination to continue investing selectively in the long-term appeal and distinctiveness of our brands, we now expect to deliver sharply lower operating profit in the first half of this year. All of us are working tirelessly to see Kering through the current challenges and rebuild a solid platform for enduring growth."

Kering continues in pursuit of two targets: to maintain a trajectory of long-term profitable growth and to confirm its status as one of the most influential groups in the luxury industry.

One of the ways in which the group is reviving its offering, particularly Gucci's, is by shaking up its leadership teams. Earlier this month, Kering appointed Stefano Cantino, who was previously Louis Vuitton’s Marketing Chief, to the newly created role of deputy CEO of Gucci, to lead turnaround plans. Under new leadership, the brand is angling for a more quiet luxury-imbued timeless essence. But, it'll take a larger marketing plan to lure back its customers.

Taking into account the deterioration of its revenue trends, the group now anticipates a decline of 40 to 45% in the first half of 2024 recurring operating income compared to the first half of 2023.