Kering has reported a 12 percent revenue drop in 2024 to €17.2 billion as “macroeconomic conditions and multiple sources of geopolitical uncertainty affected consumers’ real incomes and confidence levels in most regions of the world.” In a standout decline, Gucci’s revenues plunged by 23 percent year-over-year to €7.65 billion. Sales at Yves Saint Laurent similarly fell (down 9 percent YoY to €2.88 billion), as did those in Kering’s “Other Houses,” which include Balenciaga and Alexander McQueen (down 8 percent to €3.22 billion). Where Kering saw some success was at Bottega Veneta, where 2024 revenues were up by 4 percent to €1.71 billion, and in its eyewear division, which grew by a cool 24 percent on a reported basis to €1.94 billion.
Sales in French conglomerate’s brands’ directly operated retail network (including e-commerce) dropped by 13 percent due to “lower store traffic in adverse market conditions.” And wholesale revenue for Kering brands fell by 22 on a comparable basis, due, in part, to waning demand, but also due to the group’s enduring efforts to move away from wholesale (in favor of brand owned and operated retail) in order “to heighten the exclusivity of their distribution.”
On the profit front, Kering reported recurring operating income of €2.6 billion in 2024, down 46 percent from the 2023 level, and its recurring operating margin was down to 14.9 percent in 2024 versus 24.3 percent in 2023.
In terms of individual brand takeaways …
> Gucci: In the fourth quarter of 2024, Gucci’s revenue decreased 24% on a comparable basis. Sales from the directly operated retail network were down 21% on a comparable basis, with a slight sequential improvement in North America and Asia-Pacific. The performance of new Leather Goods lines as well as iconic Gucci lines – such as the Jackie handbag and its new interpretations – is highly encouraging. Wholesale revenue decreased 53% on a comparable basis in the fourth quarter, partly reflecting increased selectivity of distribution partners.
Kering’s leadership dove into the shifting strategy that is currently underway at Gucci, highlighting “ongoing efforts to streamline distribution and the transition underway” at it biggest brand …
> Saint Laurent: In the Q4 2024, sales were down 8% on a comparable basis. Sales from the directly operated retail network, down 7% on a comparable basis, posted a notable improvement in North America and Asia-Pacific. New Leather Goods products and reinterpretation of Yves Saint Laurent’s iconic handbags were very well received. Wholesale revenue was down 35% in the fourth quarter, due in part to efforts to streamline that distribution channel.
> Bottega Veneta: Sales in Q4 2024 were up 12% on a comparable basis with a 17% increase in the directly operated retail network, driven by outstanding performances in North America and Western Europe. Trends in Asia-Pacific improved. The House’s leather goods offer remains highly successful, underscoring the immense desirability of the Bottega Veneta brand. Wholesale revenue was down 10% on a comparable basis.
> Other Houses: In Q4 2024, sales of the Other Houses were down 4% on a comparable basis. Sales from the directly operated retail network were down 7%, while Wholesale revenue was up 9%. Balenciaga’s leather goods continued to be well received, while sales at Alexander McQueen suffered from its transition currently underway. Brioni achieved double-digit growth. Jewelry Houses continued to make progress, with a particularly healthy performance at Boucheron.
“In a difficult year, we accelerated the transformation of several of our Houses and moved determinedly to strengthen the health and desirability of our brands for the long term,” François-Henri Pinault, Kering chairman and CEO, said. “Across the Group, and at Gucci first and foremost, we made critical decisions to raise the impact of our communications, sharpen our product strategies, and heighten the quality of our distribution, all in the respect of the creative heritage that distinguishes our brands. We secured our organization, made key hirings, sped up execution, and intensified the efficiency of our operations. Our efforts must remain sustained, and we are confident that we have driven Kering to a point of stabilization, from which we will gradually resume our growth trajectory.”
One final note: Kering stated in its annual report that the European Commission’s investigation into the fashion sector, about which the Company issued a press release on April 19, 2023, is ongoing. (In ts April 2023 release, Kering stated, “In the scope of an inspection carried out as part of a preliminary investigation into the fashion sector in several countries under EU antitrust rules, the European Commission has started on April 18, 2023, an inspection at the Italian premises of Gucci, a subsidiary of Kering. The Group is fully cooperating with the Commission in the context of this investigation.”)
The group “continues to cooperate with the Commission and is monitoring the progress of this procedure to assess any potential impact on the Group at the conclusion of the investigations.”
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