In the third quarter, Gucci’s comparable revenue saw a 7% decrease, falling slightly short of analyst predictions. Kering, the Paris-based luxury conglomerate, experienced an overall sales drop of 9%, also failing to meet expectations.
Kering has faced difficulties in keeping pace with its rivals as it manages changes in leadership and creative direction at Gucci, which contributes significantly to the company’s operating profit. Gucci replaced its CEO and creative director over the past year.
This slowdown is not unique to Gucci, extending to other brands under Kering. In the last quarter, comparable sales at Yves Saint Laurent fell by 12%, while the other houses unit, featuring Balenciaga as its major brand, saw a 15% decrease, both missing expected figures. These brands faced challenging comparisons to the previous year and are reducing their reliance on wholesale distribution.
Kering’s performance contrasts with that of rival Hermes International, which reported strong sales growth of approximately 16% in the third quarter, driven by sustained demand for its coveted handbags, surpassing expectations and bolstering its stock value.
Conversely, LVMH Moet Hennessy Louis Vuitton SE, which owns renowned brands like Christian Dior and Louis Vuitton, disappointed investors with growth that was less robust than anticipated.
Kering’s shares have declined by 14% this year, trailing behind major competitors in the luxury industry.