Shares in French luxury group Kering fell 17% to 361.5 euros after the company warned that sales of its flagship Gucci brand fell nearly 20% in the first quarter due to weak demand among Chinese customers. This is proven by trade data.
As of 16:00 Moscow time, bonds showed a slight recovery, falling to €367.8. In just one trading day, Kering’s market value fell by more than 7.2 billion euros ($7.9 billion), the biggest intraday decline since 1992.
Kering CEO Francois-Henri Pinault attributed the sharp decline in Gucci’s revenue to a deeper-than-expected sales decline in the Asia-Pacific region. The fashion house has been trying unsuccessfully for several quarters to revive the Italian brand, which accounts for nearly two-thirds of its profits. The warning would spark a new wave of speculation about how Kering could reduce its dependence on a brand known for flashy designs that contradict its current tendency to understate, the newspaper said. Bloomberg.
Overall comparable sales at Kering, which also owns Yves Saint Laurent and Balenciaga, are expected to fall about 10% in the first quarter. This comes as the luxury goods market is cooling, especially in China, where consumers are reducing their spending on luxury goods due to the housing crisis and employment problems.
New Gucci designer Sabato De Sarno, appointed last year, presented his first collection in September with a sleeker, more minimalist aesthetic compared to the flashy look of his predecessor Alessandro Michele. However, the publication noted that its products arrived in stores only in February, and according to Kering, the first products of the new Ancora collection were positively received by customers.
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