Kering: 10% Decline in The Third Quarter, Still Weighed Down by Gucci

After the publication of the third-quarter financial results on Wednesday evening, Kering's new CEO, Luca De Meo declared: “we are working tirelessly on our recovery.” Revenue amounted to €3.4 billion, down 10% compared to the same period last year.

This time, the decline was slightly less severe than expected: Bloomberg analysts had predicted a slightly lower revenue of €3.3 billion. “Sales in the company's own network were down 13% on a comparable basis, a significant improvement on the second quarter, thanks in particular to stronger momentum in North America and Western Europe and the success of new products, especially in leather goods,” the group explained in a press release.

Gucci remains the main drag on the parent company's recovery: sales of the brand, now under the artistic direction of Demna Gvasalia, fell by a further 18% over the quarter, with total revenue of €1.3 billion. In this case too, the decline was less severe than in previous quarters (-24% in the first and -27% in the second.)

Following the appointment of Francesca Bellettini as CEO of the label, the iconic fashion house, which accounts for 44% of the group's sales, is testing new sales strategies. One example is the “see now, buy now” approach, which involves putting collections in stores immediately after fashion shows. In September, the “La Famiglia” collection was presented at the opening of Milan Fashion Week through the short film “The Tiger,” directed by Spike Jonze and Halina Reijn, in which superstars such as Demi Moore and Edward Norton wore Demna's first collection, available online immediately afterwards. It is still too early to know whether the designer's creativity and the new strategies put in place will be able to effectively turn the fashion house around.

The group's other flagship brand, Yves Saint Laurent, also declined by 7%, with sales of €620 million. Unsurprisingly, the Eyewear division performed best, with growth of 6%. Bottega Veneta also posted positive results, with sales up 3%.

The financial results were published a few days after Kering's colossal deal to sell its beauty division to the L'Oréal group for €4 billion.