Dive Brief:
- Kering posted full year 2024 revenue of 17.2 billion euros, or about $17.8 billion, representing a 12% year-over-year decline, according to a Tuesday release.
- Retail sales, including e-commerce, fell 13% year over year, which the company attributed to lower store traffic in adverse market conditions. Wholesale revenue for the company’s fashion houses dropped 22% “as they continued to heighten the exclusivity of their distribution,” per the release.
- Gucci revenue was down 23% year over year to 7.7 billion euros. Revenue dropped 9% at Yves Saint Laurent and 8% cumulatively at the company’s other houses, which include Balenciaga, Alexander McQueen and Brioni. Meanwhile, revenue was up 4% at Bottega Veneta.
Dive Insight:
Kering made a significant number of changes in 2024, including appointing new CEOs at Gucci, Saint Laurent and Balenciaga, and naming Louise Trotter as creative director of Bottega Veneta.
Then last week, Gucci’s creative director Sabato De Sarno left his role after two years with the brand.
In the midst of these moves, the company has struggled with declining earnings, particularly at Gucci, its largest house. Brand revenue was down 26% in the third quarter, and down 20% for the first half of the year. In Q4, Gucci revenue declined 24% on a comparable basis, with a retail decline of 21% and a wholesale drop of 53%. For fiscal 2024, the brand’s recurring operating income dropped 51% compared to 2023.
“In a difficult year, we accelerated the transformation of several of our Houses and moved determinedly to strengthen the health and desirability of our brands for the long term,” François-Henri Pinault, Kering’s chairman and CEO, said in the release. “Across the Group, and at Gucci first and foremost, we made critical decisions to raise the impact of our communications, sharpen our product strategies, and heighten the quality of our distribution, all in the respect of the creative heritage that distinguishes our brands.”
Pinault added that he was confident these efforts “have driven Kering to a point of stabilization,” and that the company would gradually resume its growth trajectory.
By region, Asia-Pacific retail revenue was down 24% for fiscal 2024, with North America down 11% and Western Europe down 9%. Japan was up 9% for the year, and the rest of the world saw an overall 3% growth.
The company indicated it would review its retail footprint with the aim to possibly close underperforming stores. Kering operates 1,813 retail locations worldwide, up 42 stores from 2023.
Looking ahead to 2025, Jean-Marc Duplaix, the company’s deputy CEO and chief operating officer, declined to provide detailed guidance. However, he said that the planned rationalization of the company’s retail network would contribute to some sequential improvement. Nonetheless, he projected that the top line would “grow very modestly” and that H1 2025 would be “quite low in terms of profitability.”
