Kering reports 12 percent decline in revenue for 2024

Business

Gucci Endless Narratives window concept. Credits: Gucci.

Luxury group Kering reported a 12 percent drop in revenue for 2024, totaling 17.2 billion euros, marking a year under pressure for the company. Recurring operating income plummeted 46 percent to 2.55 billion euros, while net income attributable to the group fell 62 percent to 1.13 billion euros. These results reflect a challenging macroeconomic environment, weaker demand for some of its flagship brands, and an ongoing strategic transformation.

Specifically, the decline in revenue is primarily due to a 13 percent drop in retail sales, including for e-commerce, a consequence of reduced foot traffic. The wholesale segment collapsed by 22 percent as Kering seeks to reinforce the exclusivity of its distribution channels. In the fourth quarter alone, the group recorded an overall decline of 12 percent, with a slight sequential improvement in most markets, except Japan. This context underscores the increased competitive pressure and the adaptation challenges Kering faces.

Despite these headwinds, the group is banking on upscaling its Houses and a strategic refocus to restore growth. "In a difficult year, we accelerated the transformation of several of our Houses and made key decisions to strengthen the desirability of our brands," said François-Henri Pinault, chairman and CEO. Kering intends to continue its investments to revive its momentum and better capitalise on its strategic pillars.

Gucci revenue declines 23 percent despite repositioning

Among the group's brands, Gucci is going through a delicate phase with a 23 percent decline in revenue, falling to 7.65 billion euros. Retail sales dropped 21 percent, while wholesale plummeted 28 percent. The brand, which recently underwent a repositioning under the direction of its outgoing creative director, is however seeing initial interest in its new lines, notably a reinterpretation of the Jackie bag.

Yves Saint Laurent posted revenue of 2.88 billion euros, down 9 percent. The 7 percent contraction in retail sales and 25 percent in wholesale reflects the brand's desire to prioritise a more selective distribution. Despite this context, profitability remains robust with a recurring operating margin of 20.6 percent.

Bottega Veneta contrasts with this trend, recording 4 percent growth, reaching 1.71 billion euros. This growth is based on a 10 percent increase in retail sales, which offsets a 15 percent decline in wholesale. The brand is benefiting from strong traction in North America and Western Europe.

Other Houses in the group, including Balenciaga, Alexander McQueen, and the jewelry brands, reported an overall 8 percent decline in revenue. However, some entities, such as Brioni and Boucheron, recorded positive performances.

Kering Eyewear and the Corporate division, on the other hand, posted sustained growth, with a 24 percent increase in revenue to 1.94 billion euros. This momentum is driven by the full integration of Creed and strong demand for the group's licensed eyewear.

Faced with these mixed results, Kering emphasises the need for strategic transformation and increased discipline in distribution. The group expresses confidence in its ability to turn the tide and strengthen its position in the luxury world.

This article originally appeared on FashionUnited.FR. It was translated to English using AI and edited by Rachel Douglass.

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