Gucci owner Kering struggles as year ends

Luxury group Kering saw all of its brands post record sales last year, but still CEO François-Henri Pinault thought not all performances lived up to their ambitions and potential. The end of the year was particularly challenging.

Strategy of exclusivity and status

Especially the resurgence of Covid-19 in China cost Kering dearly in the fourth quarter, which ended with a sales drop of 2 % (and even – 7 % on a like-for-like basis). At flagship Gucci, the comparable decline was as much as 14 %, as sales in its own stores fell 15 %. Balenciaga also struggled, partly due to its collaboration with Ye (Kanye West).

For the full year, group sales rose 15 % to 20 billion euros, accounting for a 9 % like-for-like growth. Sales in its own stores (including online) rose 10 %, driven mainly by Western Europe and Japan. Although there was hardly any growth at Gucci in 2022, Yves Saint Laurent‘s comparable sales improved by almost a quarter – again mostly thanks to its own stores. Recurring operating profit climbed 11 % to 5.6 billion euros, accounting for a net profit of 3.6 billion (+ 14 %).

Kering is still predicting continued economic and geopolitical uncertainty in the short term, but aims to remain on track. Pinault intends to further focus on brand exclusivity, strong cash flow and Kering’s “status as one of the most influential groups in the luxury industry”.