The luxury goods market has grown over the past decade, but sales have not been impressive in recent years. It is estimated that Gucci generates more than a third of its sales in China, whose economy is struggling. Kering said in a statement that the profit warning “reflects a more steep decline in Gucci's sales, particularly in the Asia-Pacific region.”
The company is scheduled to publish its official financial results only on April 23. Last year, Gucci generated two-thirds of the group's operating revenues. Kering's other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta.
Last month, Kering reported that its net profit last year fell 17%. Only on the day the decline in sales on Asian markets was announced, the company's shares fell by 14%. Over the last year, the company's shares have fallen by approximately 40%.
The condition of the giant LVMH
For comparison, its larger rival, LVMH, which owns brands such as Louis Vuitton, Moët & Chandon and Hennessy, reported stronger-than-expected sales in 2023. Last year, Hermes also celebrated its record annual sales with plans to reward all employees around the world with a bonus.
While their results have shown high resilience to the macroeconomic situation in the luxury goods market, Gucci is known to target younger, ambitious customers who, on the other hand, are more susceptible to economic pressures in more difficult times.
Last year, Kering changed Gucci's top management, appointing Jean-François Palus as CEO and Sabato De Sarno as creative director. The first items from his Ancora collection were made available in mid-February. Kering's statement said the collection had been “very well received” by customers.
