French luxury group Kering(PRTP.PA) reported a bigger-than-expected drop in third quarter sales, underperforming major rivals as its top brand Gucci and other fashion labels all suffered from a slowing appetite for high-end clothes and accessories.
The logo of French luxury group Kering is seen at Kering headquarters in Paris, France, February 13, 2023. REUTERS/Sarah Meyssonnier/File Photoreported a bigger-than-expected drop in third quarter sales, underperforming major rivals as its top brand Gucci and other fashion labels all suffered from a slowing appetite for high-end clothes and accessories.
The French luxury group, which also owns Yves Saint Laurent, Balenciaga and Bottega Veneta, said on Tuesday that sales for the third quarter came in at 4.46 billion euros , a 9% drop at constant currencies and scope, below consensus expectations for a 6% decline. Gucci, which accounts for over a half of Kering's annual sales and is in a middle of a revamp following a disappointing performance over the past two years, saw a fall in sales of around 7%.
But revenues at smaller brands that until recently had enjoyed stellar growth also declined in the quarter, with Saint Laurent posting a 12% fall and Bottega Veneta down 7%. Beyond worsening macroeconomic conditions, the company's performance reflected Kering's move to take distribution in house by reducing sales through wholesale channels in a bid to cut on promotions and move its labels upmarket, deputy CEO Jean-Marc Duplaix told reporters.
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