Following today’s release of Kering’s figures for the year ending 31 December 2024: Louise Deglise-Favre, senior apparel analyst at GlobalData, offers her view: “Kering’s difficulties continue as FY2024 sales declined 12.1% to €17.2bn, marking no tangible improvement compared to its Q3 YTD performance where sales dropped 12.3%. This is in contrast to the scenario seen at luxury rivals LVMH and Richemont, where the last quarter significantly improved. Kering’s weakness can mainly be attributed to the lasting lack of demand for its flagship brand Gucci, which contributed to the immediate departure of its creative director Sabato De Sarno last week after only two years and a few collections. Its operating income for the year nosedived 50.2% to €2.3bn, meaning investments in 2025 will be thinly spread, so it will likely be another tumultuous year for Kering, with the creative direction changes at Gucci and Bottega Veneta causing additional uncertainties.
“Gucci’s sales plummeted 22.5% in FY2024, as De Sarno’s designs failed to attract shoppers, leading to the designer’s exit. Though De Sarno’s more muted and wearable designs acted as a palate cleaner from the maximalist aesthetic created by his predecessor, Alessandro Michele, they failed to translate into commercial success due to a lack of truly impactful pieces worthy of buzz and excitement. However, Gucci’s failures cannot solely be attributed to its lacklustre designs, but also to a lack of clarity in its positioning, as it lacks the prestige to attract core luxury shoppers yet is not affordable enough for aspirational ones. Gucci’s newly appointed CEO Stefano Cantino must focus his efforts on solving this issue, alongside finding a new designer that can offer Gucci the desirable brand identity it desperately needs.
“Saint Laurent’s sales fell 9.4%, as the brand continued to suffer from the reduction in aspirational shoppers. Sales in the Other Houses segment, which includes Balenciaga and Alexander McQueen, fell 8.3%, as the former’s often outlandish and controversial designs deter some shoppers from the brand, and the latter continues to experience a transition under the new creative direction of Sean McGirr. Bottega Veneta remained Kering’s beacon of light, with sales growing 4.1%, with a particularly strong Q4, up 11%, thanks to the sustained popularity of its recognisable yet understated leather goods. However, the departure in January 2025 of creative director Matthieu Blazy, who has been replaced by Louise Trotter (previously the creative director for Carven) might hamper future growth since Blazy was so instrumental in redefining the brand’s identity.
“Asia Pacific was by far the group’s worst performing region, with comparable sales falling 24%, mainly due to the sluggish Chinese economy leading to a drop in consumer demand for luxury goods. However, demand in China should improve in early 2025, as the government’s stimulating fiscal policies start to bear fruit. Western Europe and North America also registered disappointing results, with sales dropping 9% and 11% respectively, hindered by lasting low consumer confidence amid macroeconomic uncertainty. In contrast, Japan’s sales rose 9%, boosted by the weakness of the Yen attracting tourists looking to benefit from the advantageous exchange rate for their luxury purchases. However, this was mainly driven by H1, with Q4 sales declining 6% as the Yen started to strengthen, ringing a likely end to the country’s growth in 2025. Rest of World sales grew 3%, supported by developing economies.”
