Latest news with #Gucci-owner
CNBC
10 hours ago
- Business
- CNBC
Gucci sales plunge 25% in the second quarter as woes persist at luxury giant Kering
Gucci-owner Kering on Tuesday posted worse-than-feared second-quarter results and flagged ongoing geopolitical uncertainty as woes persist at the beleaguered luxury group. Sales at the high-end fashion house dropped 15% year-on-year on a comparable basis to 3.7 billion euros ($4.27 billion), compared to the the 3.96 billion euros forecast by LSEG analysts. Gucci sales, which typically make up nearly half of total group revenues, plunged 25% over the quarter to 1.46 billion euros. Chairman and CEO François-Henri Pinault acknowledged the results were disappointing, but noted ongoing efforts to course correct the struggling luxury giant. "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," Pinault said in a statement accompanying the results. "In an economic and geopolitical environment that remains uncertain, Kering continues to deploy its strategy with the aim of achieving a profitable long-term growth trajectory," the company added. The group, which also owns the Saint Laurent and Bottega Veneta brands, said sales were weaker were across all markets, led by Japan and the wider Asia Pacific. "Kering is facing a tough reality as its two main luxury markets, China and the United States, are under strain," Yanmei Tang, analyst at Third Bridge, said in emailed comments shortly after the earnings release. Kering's share price is currently down 8% year-to-date as investors have questioned the company's ability to turn itself around after several consecutive quarters of soft sales. The appointment in June of auto veteran Luca de Meo as group CEO brought positive momentum, with his appointment set to take effect from Sept. 15. "[De Meo] has a really strong track record in turning around businesses but also in branding," Carole Madjo, head of European luxury goods research at Barclays, told CNBC's "Squawk Box Europe" last week. The incoming CEO nevertheless has a tough task ahead of him, as the industry faces the prospect of new 15% tariffs on imports to the U.S. as well as broader concerns around consumer spending, particularly in the key Chinese market. Still, analysts suggest the bigger challenge will be reviving the company's image and desirability, including under Gucci's new artistic director Demna Gvasalia, while simultaneously not alienating existing consumers. Kering's deputy CEO and brand development lead, Francesca Bellettini, said Tuesday that a "first hint of [Denma's] vision for Gucci" would come in September, with full roll out of the collection due in January 2026. "Product desirability is now a bigger problem for Kering than any tariff threat," Tang said. "Desirable brands like Hermès can nudge prices higher without hurting demand, but brands such as Saint Laurent and Gucci do not currently enjoy that level of pricing power." "Bringing newness, something fresh which has not been seen before, is, I think, what could make Gucci great again," Madjo added.
Reuters
12 hours ago
- Business
- Reuters
Exclusive: Pinaults' Artemis says not facing financial strain despite Kering's woes
PARIS, July 29 (Reuters) - A jump in standalone debt at Artemis, the Pinault family company that controls Gucci-owner Kering, is a "temporary spike", and the company is not facing any liquidity problems due to a drop in dividends from Kering and other assets, it told Reuters. The investment vehicle also said that none of its debt was tied to Kering's ( opens new tab share price performance in the terms - or covenants - agreed with lenders, as some investors have speculated. Privately-owned Artemis, chaired by outgoing Kering boss Francois-Henri Pinault, is the top investor in the French fashion and leather goods heavyweight, with a 43% stake, and controls it through a majority of voting rights. It has become the subject of increased scrutiny from investors after Reuters reported it had accumulated high debt across its portfolio as it sought to diversify investments. Some analysts are concerned the high debt level could limit Kering's ability to deliver a turnaround at struggling flagship label Gucci, at a time when major rivals such as Louis Vuitton owner LVMH ( opens new tab are investing heavily in their brands. "We have no liquidity problems," Artemis said in a statement, responding to Reuters questions about its finances. It added that the holding company had less than 500 million euros ($577 million) of debt maturing over the next two years, and more than one billion euros of available cash. Artemis, which also owns 54% of Hollywood talent agency CAA and a 29% stake in sportswear maker Puma, has historically kept a low media and investor profile. But annual accounts published alongside a recent bond issue give some insight into its finances. Artemis' consolidated group debt stood at 26.7 billion euros at the end of 2024, almost double the amount of two years earlier. Kering, the largest asset consolidated in the accounts, held around 14 billion euros of total debt at the end of 2024, built up in large part to finance an acquisition strategy spearheaded by Pinault to counter a slowdown at Gucci. On a standalone basis, which excludes operating businesses such as Kering, Artemis' debt was 7.1 billion euros as of May 31, the company said when announcing the bond issue last month. Last year, Artemis paid 227 million euros in net interest charges to service its growing debt pile, Artemis' 2024 accounts show, up from just 60 million euros the year before. In its statement, Artemis said the 7.1 billion euros of debt was a "temporary spike, only linked to the acquisition of CAA in 2023", which it said was driven by a desire to diversify beyond Europe and the luxury industry. The value of the majority stake in the Hollywood talent agency, which represents A-listers like the Obamas and Scarlett Johansson, was $3.7 billion in Artemis' 2023 accounts. The whole agency has been valued at $7 billion. Just as Artemis is spending more to service its debt, dividend payments from Kering, which accounted for more than 80% of its financial income in the last two years, are falling. Kering slashed total dividends paid on its 2024 earnings, to 739 million euros from 1.7 billion euros a year earlier, after a string of profit warnings. Barclays analysts estimate the payout may drop to 364 million euros in 2026 due to Kering's poor performance this year. Artemis is entitled to roughly 43% of Kering's payout. Kering declined to comment. Puma, which in the last two years contributed 35 million euros to Artemis' annual dividend income according to Artemis' accounts, also cut dividends paid out this year by roughly a third and warned it would be loss-making in 2025. "It is incorrect to assume that we are dependent on Kering's dividend flows to finance the company. In fact, other companies in the Group pay regular and significant dividends which cover most of our debt servicing needs," Artemis said, without elaborating. Besides its stakes in Kering, Puma and CAA, Artemis owns historic auction house Christie's, some exclusive wineries and a company offering polar cruises, all of which are unlisted. Without Kering, Artemis' businesses generated a recurring operating profit of 48.9 million euros in 2024, up from a 115-million-euro loss the year before, its 2024 accounts show. Kering shares have lost close to 60% of their value over the last 24 months, while Puma shares are down 66% in the same time. In a recent note focusing on Artemis's finances, BofA analysts said trading activity and feedback they had received suggested some investors were worried that Artemis' loans might have covenants tying them to Kering's stock performance. Artemis said such speculation was misplaced. "The Group has no financial covenants linked to Kering's share price", it said. June's bond issue tied to Kering's share performance - worth 400 million euros and used to refinance an old bond linked to Puma's stock - was oversubscribed, Artemis said. ($1 = 0.8674 euros)
Yahoo
12 hours ago
- Business
- Yahoo
Exclusive-Pinaults' Artemis says not facing financial strain despite Kering's woes
By Tassilo Hummel PARIS (Reuters) -A jump in standalone debt at Artemis, the Pinault family company that controls Gucci-owner Kering, is a "temporary spike", and the company is not facing any liquidity problems due to a drop in dividends from Kering and other assets, it told Reuters. The investment vehicle also said that none of its debt was tied to Kering's share price performance in the terms - or covenants - agreed with lenders, as some investors have speculated. Privately-owned Artemis, chaired by outgoing Kering boss Francois-Henri Pinault, is the top investor in the French fashion and leather goods heavyweight, with a 43% stake, and controls it through a majority of voting rights. It has become the subject of increased scrutiny from investors after Reuters reported it had accumulated high debt across its portfolio as it sought to diversify investments. Some analysts are concerned the high debt level could limit Kering's ability to deliver a turnaround at struggling flagship label Gucci, at a time when major rivals such as Louis Vuitton owner LVMH are investing heavily in their brands. "We have no liquidity problems," Artemis said in a statement, responding to Reuters questions about its finances. It added that the holding company had less than 500 million euros ($577 million) of debt maturing over the next two years, and more than one billion euros of available cash. DEBTS AND DIVIDENDS Artemis, which also owns 54% of Hollywood talent agency CAA and a 29% stake in sportswear maker Puma, has historically kept a low media and investor profile. But annual accounts published alongside a recent bond issue give some insight into its finances. Artemis' consolidated group debt stood at 26.7 billion euros at the end of 2024, almost double the amount of two years earlier. Kering, the largest asset consolidated in the accounts, held around 14 billion euros of total debt at the end of 2024, built up in large part to finance an acquisition strategy spearheaded by Pinault to counter a slowdown at Gucci. On a standalone basis, which excludes operating businesses such as Kering, Artemis' debt was 7.1 billion euros as of May 31, the company said when announcing the bond issue last month. Last year, Artemis paid 227 million euros in net interest charges to service its growing debt pile, Artemis' 2024 accounts show, up from just 60 million euros the year before. In its statement, Artemis said the 7.1 billion euros of debt was a "temporary spike, only linked to the acquisition of CAA in 2023", which it said was driven by a desire to diversify beyond Europe and the luxury industry. The value of the majority stake in the Hollywood talent agency, which represents A-listers like the Obamas and Scarlett Johansson, was $3.7 billion in Artemis' 2023 accounts. The whole agency has been valued at $7 billion. Just as Artemis is spending more to service its debt, dividend payments from Kering, which accounted for more than 80% of its financial income in the last two years, are falling. Kering slashed total dividends paid on its 2024 earnings, to 739 million euros from 1.7 billion euros a year earlier, after a string of profit warnings. Barclays analysts estimate the payout may drop to 364 million euros in 2026 due to Kering's poor performance this year. Artemis is entitled to roughly 43% of Kering's payout. Kering declined to comment. Puma, which in the last two years contributed 35 million euros to Artemis' annual dividend income according to Artemis' accounts, also cut dividends paid out this year by roughly a third and warned it would be loss-making in 2025. COVERING NEEDS "It is incorrect to assume that we are dependent on Kering's dividend flows to finance the company. In fact, other companies in the Group pay regular and significant dividends which cover most of our debt servicing needs," Artemis said, without elaborating. Besides its stakes in Kering, Puma and CAA, Artemis owns historic auction house Christie's, some exclusive wineries and a company offering polar cruises, all of which are unlisted. Without Kering, Artemis' businesses generated a recurring operating profit of 48.9 million euros in 2024, up from a 115-million-euro loss the year before, its 2024 accounts show. Kering shares have lost close to 60% of their value over the last 24 months, while Puma shares are down 66% in the same time. In a recent note focusing on Artemis's finances, BofA analysts said trading activity and feedback they had received suggested some investors were worried that Artemis' loans might have covenants tying them to Kering's stock performance. Artemis said such speculation was misplaced. "The Group has no financial covenants linked to Kering's share price", it said. June's bond issue tied to Kering's share performance - worth 400 million euros and used to refinance an old bond linked to Puma's stock - was oversubscribed, Artemis said. ($1 = 0.8674 euros) Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Express Tribune
01-07-2025
- Business
- Express Tribune
Valentino CEO calls in sick amid profit cuts
Italian luxury brand Valentino said on Monday its Chief Executive Jacopo Venturini was currently on sick leave, responding to media reports of his imminent departure. A possible change of CEO would, if confirmed, pile further pressure on the high-end business which reported a decline in revenues and profit last year. Italian fashion blog The platform reported on Sunday that the Italian manager, who took the role in 2020, was about to leave the group in order to have more time for himself. Contacted by Reuters, the Rome-based group, controlled by Qatari investment fund Mayhoola, sent a short statement saying the executive was on sick leave, without providing further details. Gucci-owner Kering bought a 30 per cent stake in Valentino in 2023 for $1.7 billion with a commitment to buy the remaining 70 per cent by 2028, hoping to create a second flagship label rooted in high couture. Valentino, which last year named star designer Alessandro Michele as creative director to replace long-serving Pierpaolo Piccioli, reported a 2 per cent drop at constant exchange rates in revenues last year, to 1.31 billion euros ($1.54 billion). Its core profit declined 22 per cent to 246 million euros, with the wider industry facing a demand slowdown and challenging economic backdrop. Michele's new collection, which arrived in stores only in the last quarter of 2024, according to documents registered at the local chamber of commerce, is yet to convince customers, three sources close to the matter said. Valentino's usual customers are not buying much of the collection and new converts have been slow to emerge, the sources said. Valentino wasn't immediately available for a comment about the new collection's performance. Kering's purchasing deal included cross put and call options for Kering, which is struggling to relaunch its main brand Gucci, to purchase the whole of Valentino's share capital from May 2026 through 2028. Analysts are wondering about the timing of the acquisition of the remaining stake, as it could weigh on the company, which is already struggling to cut debt. Reuters
Yahoo
30-06-2025
- Business
- Yahoo
Valentino faces uncertainty as CEO takes sick leave amid profit slowdown
By Elisa Anzolin MILAN (Reuters) -Italian luxury brand Valentino said on Monday its Chief Executive Jacopo Venturini was currently on sick leave, responding to media reports of his imminent departure. A possible change of CEO would, if confirmed, pile further pressure on the high-end business which reported a decline in revenues and profit last year. Italian fashion blog "The platform" reported on Sunday that the Italian manager, who took the role in 2020, was about to leave the group in order to have more time for himself. Contacted by Reuters, the Rome-based group, controlled by Qatari investment fund Mayhoola, sent a short statement saying the executive was on sick leave, without providing further details. Gucci-owner Kering bought a 30% stake in Valentino in 2023 for $1.7 billion with a commitment to buy the remaining 70% by 2028, hoping to create a second flagship label rooted in high couture. Valentino, which last year named star designer Alessandro Michele as creative director to replace long-serving Pierpaolo Piccioli, reported a 2% drop at constant exchange rates in revenues last year, to 1.31 billion euros ($1.54 billion). Its core profit declined 22% to 246 million euros, with the wider industry facing a demand slowdown and challenging economic backdrop. Michele's new collection, which arrived in stores only in the last quarter of 2024, according to documents registered at the local chamber of commerce, is yet to convince customers, three sources close to the matter said. Valentino's usual customers are not buying much of the collection and new converts have been slow to emerge, the sources said. Valentino wasn't immediately available for a comment about the new collection's performance. Kering's purchasing deal included cross put and call options for Kering, which is struggling to relaunch its main brand Gucci, to purchase the whole of Valentino's share capital from May 2026 through 2028. Analysts are wondering about the timing of the acquisition of the remaining stake, as it could weigh on the company, which is already struggling to cut debt. ($1 = 0.8497 euros)
