Kering’s struggles deepened this quarter as flagship brand Gucci reported a 25 percent drop in second-quarter sales on a comparable basis, reinforcing concerns over the brand’s instability amid a sector-wide luxury slowdown
Key Takeaways:
- New Kering CEO Luca de Meo begins in September amid high expectations.
- Gucci’s Q2 sales fell 25%, aligned with analyst forecasts.
- Kering’s overall revenue declined 15%, with operating income down 39%.
- The brand is undergoing its second creative overhaul in three years.
- Demna’s debut as Gucci’s new artistic director is still pending.
Gucci’s parent company Kering’s overall sales declined 15 percent, while first-half operating income plunged 39 percent to €969 million.
Once a major growth engine, Gucci has seen consumer interest cool, even before the macroeconomic headwinds hit. Alessandro Michele’s eclectic vision defined an era of success, but following his exit in 2022, the brand has faltered through two successive creative transitions. Sabato De Sarno’s brief tenure ended earlier this year, and Demna, now at the helm, has yet to reveal his first collection.
The leadership shake-up extends beyond the studio. Incoming Kering CEO Luca de Meo, formerly of Renault, is set to take the reins in September. His appointment has sparked cautious optimism, with Kering shares rebounding nearly 25 percent in the past month. Still, the stock remains down 11 percent for the year.
As the luxury sector faces a broader demand dip, Kering is adjusting pricing strategies and preparing for a crucial brand reset at Gucci, one that may define its future relevance.