Sales at Kering-owned luxury brand Gucci drop 25%

UPI

3 days ago

On Tuesday, France-based Kering, the owner of well-known brands such as Gucci and Balenciaga, reported worse second-quarter financial returns than what was expected. It pointed to "uncertain" global factors. Gucci sales dropped 15% year-on-year to around $4.27 billion versus its projected $4.5 billion. Over the quarter, Gucci sales also went down 25%. File Photo (2021) by John Angelillo/UPI | License Photo
July 29 (UPI) -- France-based Kering, the owner of Gucci, on Tuesday reported lower second-quarter financial returns than what was expected, pointing to "uncertain" global factors.
Gucci sales dropped 15% year-on-year to about $4.27 billion versus its projected $4.5 billion. Over the quarter, sales at the Italian luxury brand also went down 25%.
"Though the numbers we are reporting remain well below our potential, we are certain that our comprehensive efforts of the past two years have set healthy foundations for the next stages in Kering's development," company Chairman and CEO François-Henri Pinault said in a statement acknowledging the disappointing numbers.
Stock value in Kering fell nearly a quarter in the past year alone.
Kering, which owns other brands such as Bottega Veneta and Saint Laurent, noted that sales were weaker across the board primarily in Japan and the Asia-Pacific region.
Saint Laurent, the second-largest Kering-owned brand, also saw sales down by 10% in the quarter.
On Tuesday, Kering's CFO Armelle Poulou told the Financial Times that sales in Gucci improved among North American consumers. She added its Bottega eyewear division had grown by a single digit.
The company says in an economic and geopolitical environment that "remains uncertain," it continues to "deploy its strategy with the aim of achieving a profitable long-term growth trajectory."
In an email, Third Bridge analyst Yanmei Tang told CNBC that Kering is facing a "tough reality as its two main luxury markets, China and the United States, are under strain."
The French luxury group announced in 2021 that it banned the use of animal fur across all Kering-owned companies.