Kering first-quarter sales lag rivals with 1% rise

SALES at French luxury group Kering rose by just 1 per cent in the first quarter, as star label Gucci benefited less than rivals from a rebound in China and revenues fell in the US.

Kering’s sales came in at 5.08 billion euros (S$7.5 billion) for the three months to end-March, the group said on Tuesday (Apr 25).

The increase in comparable sales, which strip out the effect of currency fluctuations and acquisitions, was bang in line with analyst expectations for 1 per cent growth, according to a Visible Alpha consensus which also forecast flat sales for Gucci.

The pace of growth was well below the 17 per cent rise recorded by Louis Vuitton owner LVMH and the 23 per cent increase at Birkin bag maker Hermes over the same period, and comes after a 7 per cent decline in the last quarter of 2022.

“Kering’s performance in the first quarter remained mixed,” chairman and CEO François-Henri Pinault said in a statement, noting that trends had improved during the period.

Gucci, once luxury’s fastest-growing brand and the group’s main profit and revenue driver, has been slowing down markedly in recent years and its creative director Alessandro Michele left last November.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

His successor, little-known Sabato De Sarno, will join the group next month and present his first fashion show in September in Milan, leaving Gucci at risk of losing more momentum in sales and margins in coming months as his collections will not hit the stores before next year.

While smaller brand Yves Saint Laurent reported 8 per cent growth during the period, the group’s other labels suffered.

Bottega Veneta’s sales were flat, while Kering’s “other houses” division – which includes Balenciaga, still reeling from a consumer backlash in the US and Britain over ads featuring children – saw a 9 per cent decline in revenues.

North America accounted for 27 per cent of group sales in 2022 while the Asia-Pacific region, dominated by China, accounted for 33 per cent. REUTERS