Kering reports an 11% sales decline in the first half of 2024, attributed to market challenges.
- Gucci experiences an 18% revenue drop in the first half of 2024, with a significant impact in Asia-Pacific.
- Operating income for Kering falls by 42%, with further potential declines predicted in the latter half of the year.
- Saint Laurent sees a 9% decrease in sales, while Bottega Veneta’s wholesale revenue decreases by 19%.
- CEO François-Henri Pinault commits to strategic investments for future growth amid a difficult market environment.
Kering has reported an 11% decline in sales during the first half of 2024, facing a challenging market environment that has impacted its top line and profitability. Gucci, a flagship brand under Kering, saw its revenue fall by 18% during the same period, with notable decreases in direct retail operations and significant effects in the Asia-Pacific region.
The luxury group revealed a 42% dip in operating income, amounting to €1.6bn (£1.35bn). This decline in profitability underscores the difficulties faced by Kering as market conditions remain tough, and the company anticipates a potential 30% decrease in operating income during the second half of the year compared to the previous year.
Gucci’s sales figures illustrate a challenging retail environment, with second-quarter sales down 19% and a 20% decline in the directly operated retail network. This mirrors the broad market trends observed by Kering, including a marked downturn in the Asia-Pacific region, where store traffic has diminished significantly.
Saint Laurent, another prominent Kering brand, experienced a 9% drop in sales during the same timeframe. Meanwhile, Bottega Veneta bucked the trend somewhat, showing an 8% rise in sales from directly operated outlets, although its wholesale revenue dipped by 19%, aligning with the group’s overall performance issues.
François-Henri Pinault, chairman and CEO of Kering, expressed a commitment to strategic investments aimed at enriching the brand offerings and enhancing communication impact. Despite the current adverse market conditions, Pinault emphasised the long-term value creation of these efforts, reinforcing the exclusivity of their distribution and maintaining strong confidence in future recovery.
The luxury market faces significant challenges, yet strategic investments by Kering aim to position its brands for future growth.
