French luxury group Kering, the parent company of renowned brands such as Gucci and Balenciaga, has reported a significant drop in sales for its third quarter of 2023. The company experienced a -9% decline in sales compared to the same period last year, further exacerbating the slow momentum it has been facing since the beginning of this fiscal year.
For the first nine months of its fiscal year, Kering’s revenue reached €14.6 billion, reflecting a decrease of -2% compared to the previous year. Gucci, one of the group’s flagship brands, saw sales of €2.2 billion in the third quarter, representing a significant -7% decrease. The departure of its artistic director, Alessandro Michele, in late 2022 had a considerable impact on the brand. Recently, Gucci unveiled its first runway show under the creative direction of Sabato De Sarno, which received positive feedback. However, it remains to be seen if these positive reviews will translate into improved sales figures, particularly as the brand seems to be embracing the concept of quiet luxury.
In addition to Gucci, Saint Laurent also experienced a decline in sales during the third quarter, experiencing a -12% decrease, amounting to €768 million in sales. This setback comes after a promising first half of the year with a growth rate of +7%. Kering attributes the decline to high comparison bases, as the third quarter of 2022 witnessed a surge in consumption following the lifting of sanitary measures in China.
Bottega Veneta, another brand under the Kering umbrella, reported a -7% decrease in sales, amounting to €381 million. The brand managed to minimize the decline in its own retail network (-2%) by opening new stores and launching a training academy to meet consumer demand and maintain desirability.
The “Wholesale and Other” category witnessed a substantial -20% decline in sales during the third quarter. Kering has been prioritizing the internalization of its distribution to strengthen the exclusivity of its brands. François-Henri Pinault, the CEO of Kering, highlights that these results reflect the impact of the company’s decisions to enhance the positioning and distribution of its brands.
To combat the challenging market conditions and enhance its market position, Kering has implemented a reorganization strategy. The group aims to optimize the management of its brands and “reconquer its positions and influence,” as stated by François-Henri Pinault. As part of this strategy, Kering recently announced the acquisition of the perfume brand Creed and a stake in the couture house Valentino.
Useful links:
– Gucci Official Website
– Saint Laurent Official Website
