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Kering’s fourth-quarter sales missed estimates and fell 7 percent on an organic basis, with the group hit harder than rivals by the coronavirus shutdown in China.
A designer turnover at flagship brand Gucci — where creative director Alessandro Michele left the brand in November — may have exacerbated the slowdown. Soft demand in the US also contributed. Fourth-quarter sales in the key segment fell 15 percent year over year.
The brand’s full-year sales rose just 1 percent last year, despite efforts by Gucci to strengthen its merchandise, improve its China organization and improve its communication style, Kering said in a statement on Wednesday.
Last month, the brand named designer Sabato de Sarno from Valentino Studio to replace Michele. De Sarno Collections They are due to arrive in stores in early 2024, Kering said.
François-Henri Pinault, the group’s chairman and chief executive, said: “We expect a relaunch on the fashion side of the brand, but it will draw more on Gucci’s heritage.” “Gucci is about the balance between fashion authority and creating a legacy to build a timeless body – it’s not one or the other.”
Growth in Kering’s fast-growing “Other Homes” division has stalled following the Balenciaga ad campaign scandal in late November. Fourth-quarter sales fell 4 percent for the segment, with other brands including Alexander McQueen, Boucheron and Pomelato.
Balenciaga CEO Cédric Charbit and designer Demna will not be removed from their jobs, according to Kering’s internal and external investigations.
After cutting most ties since the scandal, the brand is set to show at Paris Fashion Week in March.
Kering is set to comment further on the results at a press conference at its Paris headquarters on Wednesday.
Stay tuned to BoF updates for this developing story.
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