Gucci, a luxury brand owned by Kering, is expected to see a 20% decrease in sales in the first quarter, primarily due to a slowdown in Asia where it receives more than a third of its revenue. This decline has been attributed to economic challenges that have affected the global luxury market. In contrast, LVMH and Hermès have seen resilient sales despite these challenges.
Kering, which also owns brands like Yves Saint Laurent and Balenciaga, announced that Gucci’s sales drop in the Asia-Pacific region is steeper than anticipated. The impact of this slowdown on key markets has highlighted the importance of the luxury market for Kering’s operating income last year.
While LVMH and Hermès focus on established luxury markets, Gucci targets younger, aspirational shoppers who may be more affected by economic uncertainties. To address this challenge, Kering has made changes to Gucci’s top management and introduced new collections like Ancora. The debut of this collection in mid-February was well-received and indicates a positive outlook for the brand despite challenges in the luxury market.
Kering will report its financial results on 23 April, providing more insight into Gucci’s performance in the current economic climate.
