The holiday season wasn’t so magical for Kering.
The French luxury conglomerate, led by François-Henri Pinault, saw its overall sales decline by 6 percent in the last quarter of 2023, Hypebeast reported on Thursday. In total, the brand saw sales of 5 billion euros ($5.4 billion) in the three months ending December 31. While that’s a sizable dip, it’s less than the 8 percent decrease that industry experts had forecasted.
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At Gucci, the group’s top-performing brand, sales fell 4 percent, on the lower side of analysts’ expectations, Hypebeast noted. (That didn’t include items designed by the house’s new creative director, Sabato De Sarno, whose designs will become available in stores this spring.) Gucci made up some 68 percent of Kering’s total operating profits in 2023, and Pinault said the conglomerate would reinvest in the brand this year.
“We are focused on revitalizing Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterizes this iconic House,” the CEO said in a statement. “In a market environment that remains uncertain in early 2024, our continuing investments in our Houses will put pressure on our results in the short term. Thanks to the experience gained across the group through a decade of outstanding expansion, we are confident in achieving our long-term ambitions.”
Pinault was referring to an overall slowdown that’s taken place in the luxury market in recent months. Facing uncertain economic headwinds, many consumers have cut back on their spending, especially on items that may not be essential, such as luxury clothing and accessories. Kering did note that it’s seen positive growth in the Asia-Pacific region, a trend that is being experienced by many companies: Brands such as Hermès and Louis Vuitton have been investing in places like Hong Kong, where they see potential for further luxury spending.
If there is any good news in Kering’s latest results, it’s that the Q4 numbers were slightly better than those in Q3, when sales dipped a whopping 13 percent. During that period, the group saw sales tally 4.5 billion euros ($4.8 billion). For the entirety of 2023, Kering’s net profits fell 18 percent, to 3.1 billion euros ($3.3 billion).
While we can’t know exactly how the luxury market will shake out this year, Kering is likely hoping for a more bountiful 2024.