Dive Brief:
- Kering revenue dropped 13% to 4.46 billion euros, or approximately $4.72 billion at current exchange rates, from 5.13 billion euros in Q3 last year, with almost all of its fashion brands experiencing double-digit declines, the company announced Tuesday in a press release.
- Gucci, the company’s largest house, was down 14% to 2.21 billion euros from 2.58 billion euros; Yves Saint Laurent dropped 16% to 768 million euros from 916 million euros; Bottega Veneta fell 13% to 381 million euros from 437 million euros; and revenue from the company’s other houses, which include Alexander McQueen, Balenciaga and Brioni, declined 19% to 805 million euros combined, down from 995 million euros. The company stated that “Brioni’s sales were up,” but did not disclose additional figures.
- Revenue from Kering’s directly operated retail network dropped 6%, which the company attributed to “lower traffic and contrasted performances across regions,” while wholesale and other revenue “fell sharply” down 20%, which the company stated was “due in particular to the Group’s ongoing efforts to tighten its control over distribution.”
Dive Insight:
The great luxury reset of 2023 continues as Kering reports declines across multiple categories following a report of modest 2% gains in H1.
Other luxury houses have also seen a softening, including LVMH, which reported a 1% revenue rise for Q3 after two previous quarters of double-digit increases, and Ferragamo, which saw revenues slide 8.3% in the first nine months of the year. Zegna Group bucked the trend, however, with a revenue increase of 20.8% for the third quarter.
Kering generated a revenue of 14.6 billion euros for the first nine months of 2023, down 3% from the same period in 2022.
Meanwhile, its eyewear and corporate division posted a 31% Q3 gain to 333 million euros from 253 million euros, buoyed in part by its acquisition of sunglasses brand Maui Jim in 2022, the company stated.
“Beyond the challenging macroeconomic conditions and softening demand across the luxury industry, the change in our revenue performance in the third quarter reflects the impact of our decisions to further elevate our brands and their distribution,” François-Henri Pinault, Kering chairman and CEO, said in the release. “The organization we put in place in July will enable us to strengthen the steering of our Houses in the current market environment and to reclaim our positions and influence. With the acquisition of Creed completed last week, one of the world’s most distinguished high fragrance houses has joined our family, propelling our ambitions in beauty onto the next stage.”
It’s been a year of rebuilding and restructuring for the brand in many ways.
In July, Armelle Poulou was appointed CFO, and Kering announced it had acquired a 30% stake in Mayhoola-owned Valentino as part of 1.7 billion euro-deal that includes an option for Kering to acquire a 100% stake in the Italian luxury brand by the end of 2028.
Kering also saw the departure of Gucci president and CEO Marco Bizzarri in July, with Jean-François Palus, Kering Group’s managing director, stepping in to handle the role for a transitional period. Earlier in the year, Gucci senior executives Piero Braga and Robert Triefus also exited the company.
In September, Alexander McQueen’s long-time creative director Sarah Burton announced she would be leaving. Kering named Seán McGirr to the role less than a week after Barton’s final show for the house.
