(Bloomberg) – Gucci’s sales stumbled in the first quarter as efforts to restore Kering SA’s largest brand failed to produce signs of turnaround again.
Paris-based Kelin said on Wednesday that sales fell 25% in Gucci. Analysts are expected to drop 24%.
Kering also owns Yves Saint Laurent, Bottega Veneta and Balenciaga, which earned over 60% of the profit from Gucci, which has recovered from the French group’s sick label. The company, controlled by the billionaire Pinault family, led the company to the Demna Gvasalia (known as Demna) last month, as its next Gucci designer.
Demna has been artistic director at Balenciaga for a decade, overseeing strong growth with a compelling look like Triple S sneakers, which can be identified by exaggerated scale. But Gucci is a bigger brand, entering a new designer for the second time in about two years, meaning any turnaround will take time.
“Demna is part of the group and he has worked with Gucci’s team,” Chief Financial Officer Armelle Poulou said in a call with reporters.
Kering’s stock has fallen 50% over the past year, worse than Richemont, Hermes and LVMH.
In addition to Killing’s internal problems, the wider luxury market is trapped in a period of growth caused by the portion of Chinese shoppers buying. The outlook for the industry is further darkened by U.S. tariffs and an escalating trade war.
Kering has the ability to protect its profits through price increases, Poulou said, adding that the group is still analyzing the initial tariff announcement.
Even more resilient luxury groups, such as LVMH Moët Hennessy Louis Vuitton SE and Hermès International SCA, have recently released disappointing results. Overall, Kering sales fell 14% in the first quarter.
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