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Gucci sales plunged in the first three months of the year as the luxury downturn showed no signs of abating.
The worse-than-expected 25% slide to 1.6 billion euros (about $1.8 billion) contributed to a 14% drop in owner Kering’s revenues to 3.9 billion euros.
It continues a trend that began last year for Gucci and Kering.
“As we had anticipated, Kering faced a difficult start to the year,” CEO François-Henri Pinault said in a press release on Wednesday.
“We are increasing our vigilance to weather the macroeconomic headwinds our industry faces, and I am convinced that we will come out stronger from the present situation.”
Yves Saint Laurent sales fell 9% in the first quarter, while Bottega Veneta and Other Houses rose 4% and 11% respectively.
Kering stock fell 3.5% in Paris on Thursday, bringing the decline this year to more than 28% and 48% over the past 12 months.
Recession fears and the impact of President Donald Trump‘s tariffs are among the factors that have dampened luxury spending in markets such as Asia and North America.
Kering reported a 25% decline in the Asia-Pacific region, in line with trends for the last three months of 2024. Western Europe and North America were both down 13%), with Japan declining 11%.
Kering’s rival LVMH, which owns brands including Givenchy and Fendi, said this month that first-quarter sales fell 3%, compared with the 2% rise forecast by analysts.
Pinault said in February that Kering had “no plans” to move production out of Europe to counter tariff threats.
Last month Kering announced the appointment of Demna Gvasalia, formerly at Balenciaga, as Gucci’s new artistic director in an attempt to revive the brand.
The move followed a shift in consumer preferences away from the brand’s eclectic and maximalist aesthetic, which had previously defined its identity.
Younger consumers are now gravitating toward quieter, minimalist luxury, championed by brands such as Miu Miu and Loewe.
Analysts at Deutsche Bank said the case for investing in Kering was “uncertain at this point given the change in creative designer leading to a ‘wait and see’ approach. The sequential slowdown in all regions except Asia is slightly worse than peers.”
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