French luxury group Kering saw its shares plummet by 14% after issuing a profit warning due to an anticipated 20% decline in Gucci sales in the first quarter of 2024, CNBC reports.
The decline in sales is attributed to a slowdown in Asia, particularly in China, which is facing broader economic challenges. The company forecasts a 10% drop in overall group revenues for the first quarter. The warning sets Kering apart from other luxury brands like LVMH and Hermes, which have remained resilient despite economic challenges.
Gucci, once a star performer, has faced market share loss amid changing consumer preferences and economic uncertainties. Kering is committed to investing in its brands, including Gucci, despite lower margins. The recent launch of Gucci’s new Ancora collection has received positive feedback, suggesting potential for recovery.