France’s Kering said annual sales declined in 2023, as the luxury conglomerate continued to struggle with comparable sales declines across all major brands during the fourth quarter.
Kering, the owner of Gucci, Saint Laurent and Balenciaga brands, said annual revenues fell 4 percent to EUR 19.6 billion in 2023, following a fourth-quarter sales decline of 6 percent, or down 4 percent on a comparable basis.
During the three months ending December 31, sales from the directly operated retail network dropped 2 percent on a comparable basis. By region, revenue grew in Asia-Pacific and Japan, while “trends in Western Europe and North America improved sequentially,” said the company.
In the fourth quarter, Gucci comparable sales decreased 4 percent, and sales from the directly operated retail network were down 4 percent, despite improvements in North America and Asia Pacific, as well as in leather goods and women’s ready-to-wear.
At Saint Laurent, comparable sales were down 5 percent, while revenue from the directly operated retail network was stable, thanks to a strong performing Asia-Pacific and Japan, while sales in North America and Western Europe declined.
Bottega Veneta quarterly comparable sales were down 4 percent, and up 5 percent in the directly operated retail network, driven by the brand’s solid performance in North America and “encouraging signs” in Asia-Pacific, particularly Mainland China.
Quarterly sales from the ‘Other Houses’ segment (Balenciaga, Alexander McQueen and Brioni) dropped 5 percent on a comparable basis, while sales from the directly operated retail network were up 4 percent. Trends improved significantly for Balenciaga in North America and Western Europe, and the house also delivered a solid performance in Asia-Pacific.
Kering’s ‘Jewelry Houses’ clocked double-digit growth in the fourth quarter, driven by the success of all collections, while Kering Eyewear sales were up 6 percent in the quater.
“In a trying year for the group, we strengthened our organization and took significant steps to further enhance the visibility and exclusivity of our houses. We are focused on revitalizing Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterizes this iconic house,” said François-Henri Pinault, chairman and chief executive officer, Kering.
“The launch of Kering Beauté and the acquisition of Creed, a storied maker of high-end fragrances, will enable us to capture our share of the steadily growing beauty market. In a market environment that remains uncertain in early 2024, our continuing investments in our Houses will put pressure on our results in the short term. Thanks to the experience gained across the group through a decade of outstanding expansion, we are confident in achieving our long term ambitions.”
Kering’s earnings release coincides with Hermès earnings update on February, with the fellow Parisian firm reporting a sales uptick of 21 percent in 2023, proving the resilience of quiet luxury last year, amidst a downturn in luxury globally.
Last month, rival conglomerate LVMH said sales for the full-year 2023 grew 13 percent, with the French firm recording organic across all business groups except wines and spirits, with double-digit organic growth seen in Europe, Japan and the rest of Asia.