Luxury group Kering, known for its renowned brands such as Gucci and Yves Saint Laurent, has announced a decline in net profit and sales for 2023. Net profit is expected to decrease by 17% to €2.98 billion, while sales are projected to decline by 4% to €19.57 billion. These figures reflect the ongoing restructuring efforts within Kering’s flagship brand, Gucci.

Looking ahead to 2024, Kering expects its investment strategy to continue impacting the Group’s annual recurring operating income, resulting in lower figures compared to 2023, particularly in the first half of the year. Despite the challenges faced, the company remains dedicated to revitalizing Gucci.

CEO François-Henri Pinault expressed confidence in Gucci’s long-term prospects, emphasizing the brand’s remarkable development over the past decade. He stated, “In what has been a difficult year for the Group, we have strengthened our organization and taken decisive action.”

Kering is implementing a strategy of “elevation,” which involves investing in its brands to achieve sustainable, long-term growth. This approach aligns with the company’s commitment to rejuvenate Gucci and introduce fresh ideas to captivate consumers. Designs by Sabato de Sarno, who assumed the role in January 2023, are expected to be available for sale in the near future.

Gucci, responsible for over half of Kering’s turnover, experienced a 6% decline in sales, amounting to €9.9 billion. In response, Kering has instituted management changes, with Jean-François Palus, a close collaborator of François-Henri Pinault, taking charge of the brand.

Other brands under the Kering umbrella also faced challenges in 2023. Sales for Yves Saint Laurent decreased by 4% to €3.18 billion, while Bottega Veneta saw a 5% decline to €1.6 billion. Balenciaga, in particular, suffered from a poorly received advertising campaign, resulting in a 9% decrease in sales to €3.5 billion. The only brand to experience growth was Kering Eyewear, with a significant 38% increase in sales to €1.6 billion.

Despite falling short of expectations in terms of financial performance for 2023, Kering remains committed to its long-term growth strategy. The company’s restructuring efforts within Gucci and investments in brand elevation showcase its determination to regain momentum and drive success across its luxury portfolio.

Useful links:
1. Kering Official Website
2. Gucci Official Website