The group headed by François-Henri Pinault fell sharply in the third quarter. All its divisions were affected, with the exception of Kering Eyewear. The group is counting on Gucci’s organizational evolution, with its new artistic director, Sabato De Sarno, to help it regain momentum.
A testing third quarter for Kering. While Lvmh saved the day and Hermès held up rather well during this period, the group headed by François-Henri Pinault faces a number of challenges if it is to return to growth.
Against the backdrop of a slowdown in the luxury goods sector, Kering’s sales fell by -13% on a reported basis to €4.46 billion between July and September 2023. On a comparable basis, sales were down -9%, “taking into account a negative currency effect of -6% and a scope effect of +2% linked to the acquisition of Maui Jim”.
Counter-performance in wholesale
The downturn was more marked in the wholesale network, where sales fell by 20% on a like-for-like basis, than in the directly-operated network (-6% on a like-for-like basis). To explain the poor performance of wholesale, Kering cites “the ongoing tightening of control over distribution”. While its boutiques suffered from “more moderate traffic”, with “contrasting performances by region”.
In the first nine months, group sales fell by 3% to 14.6 billion euros.
In further bad news for the third quarter, all the Houses fell back, its Kering Eyewear division being the only one to post a modest rise (+2%) on a comparable basis to 331 million euros. Its +34% jump on a reported basis is in fact linked to the contribution of Maui Jim, acquired at the end of 2022.
Apart from this one piece of good news for the quarter, Kering has little to be satisfied about.
Gucci depends on the success of its new artistic director
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