Kering’s fourth-quarter sales missed estimates, falling 7 percent on an organic basis as the group took a harder hit from rivals from coronavirus disruptions in China.
A designer transition at flagship brand Gucci — where creative director Alessandro Michele exited the brand in November — may have exacerbated the slowdown. Softer demand in the US may also have contributed. Fourth-quarter sales at the key unit fell 15 percent year-on-year.
Despite efforts at Gucci to reinforce merchandising, revise its China organisation and ramp up the rhythm of communications last year, the brand’s full-year sales rose just 1 percent, Kering said in its statement Wednesday.
Last month, the brand named a designer from Valentino’s studio, Sabato de Sarno, to succeed Michele. De Sarno’s collections are set to arrive in stores in early 2024, Kering said.
”We expect a reset on the brand’s fashion component, but more capitalising on the heritage of Gucci,” the group’s chairman and CEO François-Henri Pinault said. “Gucci is about the balance between fashion authority and capitalising on the heritage to build the timeless component — it’s not one or the other.”
Growth also stalled in Kering’s fast-growing “Other Houses” division in the wake of Balenciaga’s advertising campaign scandal in late November. Fourth-quarter sales fell 4 percent for the division, whose other brands include Alexander McQueen, Boucheron and Pomellato.
Balenciaga’s top leadership including CEO Cédric Charbit and designer Demna will not be removed from their posts, Kering said, after internal and external surveys found “no fouls from anyone, just errors of judgements,” deputy CEO Jean-François Palus said.
After suspending most communications since the scandal, the brand is set to show during Paris Fashion Week in March.
Kering is set to comment further on its results at a press conference at its Paris headquarters Wednesday.
Stay tuned for BoF updates to this developing story.
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