Kering joins the ranks of luxury slumpers as Q4 sales decline

The luxury industry has been in a lull of late—at least the big players like Kering, which reported a 6% slump in its Q4 revenue.

It was an improvement on the 8% quarterly revenue drop analysts had expected for the French luxury conglomerate.

Meanwhile, sales for Gucci, Bottega Veneta, and Yves Saint Laurent—all under the Kering umbrella—were down 8% YoY.

The losses were somewhat mitigated by the retailer’s improved sales across the Asia-Pacific region, but Kering noted that its recurring operating income would likely decline in H1 2024.

Chairman and CEO François-Henri Pinault also said he was focused on “revitalizing” brands like Gucci.

“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,” he said in a statement.

Ripple effect: Many apparel brands have been hurt by geopolitical tensions as well as reduced consumer spending in response to rising costs in a post-Covid economy.

Paul Smith, for instance, shuttered three of its stores in Germany, which has been affected by recession. Meanwhile, others like Scotch & Soda and David’s Bridal filed for bankruptcy in the past year.

Then there was Scottish fashion label Christopher Kane, which was looking for new buyers as it urgently sought to refinance its debt last year (it eventually landed a deal).

Of course, not everyone is in a slump. In fact, Kering’s biggest competitor, LVMH, saw a 10% rise in organic sales in Q4, thanks to growth in its fashion and leather goods division.
Likewise, Italian luxury group Ermenegildo Zegna recently reported 1.9 billion euros in sales in 2023, marking a 27.6% jump from 1.5 billion in 2022.