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Luxury slowdown will continue into 2024, Gucci owner Kering says

Billie Eilish for Gucci (Gucci)
Billie Eilish for Gucci (Gucci)

Gucci owner Kering says that the luxury goods downturn will continue this year, after a “trying” 2023.

Revenue fell by 4% to €19.6 billion, as appetite for expensive clothes and handbags faded. Much of the fall-off came late in the year, with fourth-quarter revenues down by 15%.

At Gucci, full-year revenue fell by 6% to €9.87 billion, while sales at Yves Saint Lauren were down by 4%. Revenue also declined at Bottega Veneta and Kering’s other clothes-led houses like Alexander McQueen, but its eyewear division saw sales rise.

Boss François-Henri Pinault said: “In a trying year for the group, we strengthened our organization and took significant steps to further enhance the visibility and exclusivity of our Houses.

“We are focused on revitalising Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterizes this iconic house.”

That revitalisation will come under new creative director Sabato De Sarno, who took over the role last year.

Luxury brands across the world saw sales fall off at the end of 2023 after an initial surge when countries reopened to tourists after the pandemic.

Looking ahead, Kering expects profits to decline in 2024 as the luxury sector faces an “ongoing normalisation” following an initial post-pandemic boom in sales, while the fashion house will spend to revitalise its major brands.

Pinault added: “In a market environment that remains uncertain in early 2024, our continuing investments in our Houses will put pressure on our results in the short term. Thanks to the experience gained across the group through a decade of outstanding expansion, we are confident in achieving our long-term ambitions.”

With the decline in sales having been expected, Kering’s shares rose by 3.8% this morning in Paris to €404.90. That still leaves them down 28.7% over the last year, however.

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