Kering, known for luxury brands like Gucci and Yves Saint Laurent, is aiming for a rebound after a tough sales period. The company reported a 10% drop in sales for Gucci last quarter, with total sales down 3% to around €3.9 billion (about $4.64 billion). Kering’s CEO, Luca de Meo, remarked, “2025 was not the year we wanted.” The company’s revenues fell to €14.7 billion, down 10% from the previous year, and profits dropped by a significant 33%.
Despite these setbacks, Kering’s stock saw a jump of over 10% after the announcement, signaling some investor optimism. This surge in shares also positively affected other luxury brands like Burberry and Hermès.
Experts suggest that Kering’s struggles mirror broader challenges in the luxury sector. As consumer spending in China wanes, brands that once thrived post-COVID are feeling the pressure to adapt. Kering’s strategy now includes new leadership; Demna, known for his innovative approach, was appointed Artistic Director of Gucci to revamp its appeal.
Analyst Luca Solca from Bernstein noted a slight improvement in Kering’s overall operations. “It could indicate a shift for Gucci toward growth,” he stated, emphasizing the importance of this moment for potential investors.
Looking ahead, Kering is focused on reducing its debt and streamlining operations. The sale of its beauty division to L’Oréal for €4 billion is part of this strategy. De Meo highlighted plans to reinvigorate the brand and expand into the growing wellness and longevity markets, where they see considerable future value.
In the broader context, luxury brands are adjusting after a boom driven by pandemic-related spending sprees. Current trends on social media indicate that consumers are now more discerning, demanding value and authenticity from brands. Kering’s future success will likely depend on how well it can engage this new wave of shoppers.
As Kering prepares to unveil more detailed strategies in upcoming meetings, analysts and investors alike are watching closely for signs of recovery. If successful, this could set the stage for a reinvigorated luxury market amidst a challenging retail environment.
For more insights into Kering’s financials, you can check the official report here.
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