Gucci owner Kering pledges to pump more money into the luxury brand after sales slump
French luxury group Kering has pledged to pump more money into Gucci to revive its iconic brand after another decline in sales.
While clouds hang over the industry, the company said revenues in the three months to the end of December were 6 per cent lower than a year earlier, at £4.2 billion.
Sales of its brands Gucci, Bottega Veneta and Yves Saint Laurent fell by 8 percent, confirming the slowdown in demand for luxury goods.
TOP BELL: As clouds hang over the luxury goods industry, revenues for Gucci, worn by Miley Cyrus to the Grammy Awards (pictured), fell 6% from the previous year
CEO François-Henri Pinault said the company would continue to invest, even if it meant lower profits.
He added: “This will put some pressure on our results in the short term, and I am absolutely determined to make this short-term pain pay off in the long term.”
“We are focused on revitalizing Gucci.” In 2023, sales fell by 4 per cent to £16.7 billion while profits fell by 15 per cent to £4 billion.
After the wave of post-pandemic splurges fueled stellar sales, consumers have resorted to cutting back on their consumption, particularly younger, less affluent customers who are more vulnerable to inflation.
Kering shares rose 4.9 percent in Paris but are 50 percent below their 2021 peak.
“Gucci’s performance is not worse than expected, which is a relief,” RBC analyst Biral Dadania said.
Gucci has recently overtaken luxury rivals such as LVMH-owned Louis Vuitton and Chanel.
(tags for translation) Daily Mail