Corona crisis halves profit at Gucci owner Kering

French luxury group Kering, owner of Gucci and rival to LVMH, saw its sales drop by 44 % in the past quarter. Despite the first signs of recovery after the lockdowns, especially in China, the second half of the year remains uncertain.

Recovery set to begin?

In the second quarter, sales of the luxury holding company Kering fell 43.7 %, bringing the total to almost 2.2 billion euros. For the first half of the year as a whole, profits even fell by 53 % to 272.6 million euros. The group’s operating margins fell to 17.7 %, all as a result of the corona crisis.

Nevertheless, the group behind Gucci and Yves Saint Laurent performed slightly better than the drop of 46 % analysts had expected. CFO Jean-Marc Duplaix also reported an improvement: the figures are encouraging in Asia and the recovery is now set to begin in the United States and Europe.

Lack of tourists

The company does not want to make any predictions about the second half of the year, as there still is too much uncertainty. According to Duplaix, the lack of tourism will weigh on the sector for some time to come, and the losses of the first half of the year cannot be compensated in the rest of the year.

Turnover for the group’s main brand, Gucci, fell by 45 % in the period April to June on a comparable basis. Yves Saint Laurent was hit even harder, with a 48 % decline in turnover. Rival LVMH, on the other hand, managed to limit its own decline in turnover to 38 %.