The group said that one of its brands, Gucci, saw sales that are likely to drop by approximately 20%. Kering further indicated that it will release its Q1 2024 financials on 23 April 2024. Bloomberg reported that the group experienced its toughest day on the trading floor since March 2020, as it lost around €6.3bn from its market value.

In its press release, Kering attributed Gucci’s sales declines to consumer slowdowns in the Asia-Pacific region. The Italian brand, known for its extravagant designs, reportedly comprises approximately two-thirds of Kering’s profits. Run by the Pinault family, the Paris-based organisation has been attempting to resuscitate interest in Gucci.

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Recently, the fashion group has battled to keep up with competitors such as LVMH Moët Hennessy Louis Vuitton SE (MC.PA) and Hermès International SCA (RMS.PA). In February 2024, Kering reported a 17% drop in net profit. In the last year, the company’s stock plunged by more than 23%. While luxury sales have slowed down globally, thanks to their more diverse portfolios, Louis Vuitton and Hermès International suffered less of an impact.

According to Bloomberg, analysts from Vital Knowledge issued a client note, which read:

Gucci has been encountering some company-specific problems for a few quarters, but this update will raise further worries about the state of consumer spending and China’s economy.

Kering’s portfolio also includes brands such as Yves Saint Laurent and McQueen. Overall, Kering Q1 sales are likely to dip by 10%.

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