Kering to overhaul leather goods category after profit warning
Revenue at Gucci, its largest brand fell 25% to €1.64 billion. The market update is Kering’s third profit warning in a row and the company now sees operating income in 2024 at approximately €2.5 billion implying a second half 2024 operating income of €1 billion, down 50% compared with the second half of 2023.
Kering said the Gucci turnaround was being hampered by the wider luxury market declines. Sales at Saint Laurent fell 12%, while the ‘Other Houses’ including Balenciaga and Alexander McQueen, fell 14%. The Bottega Veneta brand bucked the negative trend with sales increasing 5%. The eyewear and corporate division, which includes Kering Beauté, was also up 7%.
By region, Kering retail sales in North America fell 15% in the third quarter, Western Europe was down 11% and Asia Pacific declined 30% excluding Japan, which was up 3%, and the rest of the world up 2%. Kering said that its growth in Japan had significantly slowed, mirroring LVMH’s experience during the quarter.
In its latest financial statement Kering said that it is pursuing the overhaul of its leather goods category with “the introduction of a host of new products late in the quarter well underway”, according to the earnings release. Gucci is also working on making its communication even more efficient with a new campaign that promotes both the Blondie handbag (which sits at the higher end of the pricing scale), as well as Gucci’s heritage.
Credit: Harper Sunday