Gucci's Revenue Plummets by 25%, Kering Cautions of the Lowest Annual Profit in Years

The ongoing global luxury downturn persists in constricting sales for the largest premium brands.

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The industry-wide luxury downturn persists, with French luxury behemoth Kering cautioning that revenues may fall below the already pessimistic projections due to diminishing performance at its premier brand, Gucci.

Kering's third-quarter report indicated that Gucci's revenue declined by 25% year-over-year, resulting in an overall 16% sales decrease across Kering's brand portfolio. Saint Laurent, the company's second-largest brand, experienced a 12% decline in sales, while the other brands, including Balenciaga, McQueen, and Boucheron, also reported subpar performance.

Kering anticipates "significant uncertainties likely to impact demand among luxury consumers in the forthcoming months," as reported by Business of Fashion. The luxury slowdown has primarily resulted from diminishing demand in crucial markets within the Asia-Pacific region, especially in China, where expenditure has significantly declined.

The announcement follows closely on the heels of competitor LVMH reporting a 16% decrease in third-quarter sales, resulting in a share value reduction of up to 7%. Despite luxury brands using strategic measures such as shop closures and innovative modifications, these strategies are still contingent upon customer confidence and the overall condition of the global economy.