Gucci anticipates a 20% decline in sales
According to Gucci’s Paris-based owner Kering, sales in the first quarter are predicted to drop by 20% as a result of a slowdown in Asia.
The warning stands in contrast to competitors Hermès and LVMH, whose sales have held steady.
Although the luxury market has expanded over the last ten years, recent sales have not been as strong.
Gucci is estimated to get more than a third of its sales from China, whose economy has been struggling.
The profit warning, according to a statement from Kering, “reflects a steeper sales drop at Gucci, notably in the Asia-Pacific region”. On April 23, the company is expected to release its financial results. Kering’s other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta.
Kering revealed last month that its net profit dropped by 17% from the previous year. In the last year, its shares have dropped by over 23 percent.
By contrast, its larger rival LVMH—owner of Hennessy, Moët & Chandon, and Louis Vuitton—reported better-than-expected sales for 2023.
In addition, Hermes celebrated its record-breaking annual sales last year and announced plans to give bonuses to every worker in the globe.
Even though their findings demonstrated the luxury market’s resilience, Gucci is well-known for attracting younger, aspirational customers who are more susceptible to financial strains.
Last year, Kering changed Gucci’s top management by appointing Jean-François Palus as its chief executive officer and Sabato De Sarno as its creative director.
In mid-February, the first pieces from his Ancora collection went on sale.
According to Kering’s statement, the collection has received a “highly favorable reception”.
Source; BBC
