The French luxury goods group Kering SA had to accept a 12 percent drop in sales for the 2024 financial year, as the company announced on Monday evening. Last year, the group sales were 17.2 billion euros – a clear sign of the company’s continuing challenges. The recurring operational result fell by 46 percent to 2.55 billion euros, while the net profit attributable to the group decreased by 62 percent to EUR 1.13 billion. These numbers reflect a difficult macroeconomic environment, a weaker demand for important brands and an ongoing strategic realignment.
Kering under pressure
The decline in sales is primarily due to a lower customer frequency due to a lower customer frequency. The wholesale segment collapsed by 22 percent after Kering had increasingly geared its sales strategy for exclusivity. In the fourth quarter, the group recorded a decline of 12 percent, with a slight recovery in most markets – with the exception of Japan. This development illustrates the increasing competitive pressure and the challenges of market adjustment, with which Kering continues to be faced with. Despite this headwind, the group relies on a premiumization of its brands and a strategic realignment in order to boost growth again. “In a challenging year, we accelerated the transformation of several of our fashion houses and took important measures to increase our brands’ desire,” said CEO François-Henri Pinault. Now Kering is planning targeted investments to strengthen its strategic columns and set new growth impulses.
Gucci in transition
Kering’s previous draft horse Gucci is located in a difficult transition phase. The turnover of the Italian luxury brand fell by 23 percent to 7.65 billion euros. The retail processes decreased by 21 percent, while the wholesale business collapsed by 28 percent. The brand went through a repositioning under the creative direction of Sabato de Sarno last year. The first positive signals were already recognizable, especially when it comes to reinterpretation of the iconic pocket line “Jackie”. After the surprising farewell to De Sarno, Gucci is facing a fresh start again. But not only Gucci had to accept losses. Saint Laurent recorded a decline in sales from nine percent to 2.88 billion euros. The retail processes dropped by seven percent, while wholesale collapsed by 25 percent. This is also part of a conscious strategy to make sales policy more selective for the French luxury label. Despite the declines, profitability with a recurring operational margin of 20.6 percent remains stable. The other brands of the group – including Balenciaga, Alexander McQueen and the jewelry brands – also recorded a total sales decline of eight percent. However, some labels, such as Brioni and Boucheron, developed positively.
Bottega Veneta and Kering Eyewear: Growth in a difficult market environment
Bottega Veneta stands out positively with a sales increase of four percent to 1.71 billion euros. The retail processes of the Italian luxury brand in particular increased by ten percent and thus compensated for the decline in wholesale by 15 percent. The brand benefits from strong demand in North America and Western Europe. Kering Eyewear and the corporate area also showed a solid performance with sales growth from 24 percent to 1.94 billion euros. This development was primarily driven by the complete integration of the parfum brand Creed and a high demand for the licensed glasses collections of the group. In view of the mixed results, Kering emphasizes the need for a strategic transformation and a disciplined sales policy. However, the group is confident of strengthening its position in the luxury industry and getting back on growth course in the medium term.
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In view of these different results, Kering emphasizes the need for a strategic transformation and an increased discipline in sales. The group is confident that it can correct its course and to consolidate its position in the luxury world.