On October 23, French luxury conglomerate Kering announced that its third-quarter revenue amounted to €3.78 billion (approximately $4.08 billion), a 16% decline compared to the same period last year. The global market headwinds hit the group’s key brands, including Gucci, Saint Laurent, Balenciaga, and Alexander McQueen, all of which saw double-digit declines. Meanwhile, Bottega Veneta and the Eyewear division continued to grow despite the challenges.
Gucci’s Struggles Continue
Kering’s biggest challenge remains Gucci. The brand reported third-quarter revenue of €1.641 billion, marking a 25% decline year-on-year. Despite efforts to revitalize the brand under new leadership following the 2023 departures of Creative Director Alessandro Michele and CEO Marco Bizzarri, recovery is still slow. Wholesale revenue saw a steep 38% drop, which is attributed to Gucci’s strategic reorganization of its distribution channels and the challenging market environment.
Saint Laurent and Other Brands Also Face Headwinds
Saint Laurent, which had consistently shown growth over the years, also faced a market downturn this quarter, with sales falling by 12%. While new product launches are expected by the end of the year, it remains to be seen how the current tough market conditions will affect their success.
Similarly, the “Other Houses” segment, which includes Balenciaga and Alexander McQueen, is facing difficulties. Although Alexander McQueen’s new collection under its revamped leadership has been well received, the segment overall saw a 14% decline in sales. Additionally, wholesale revenue plummeted by 28%, exceeding expectations for the downturn.
Bottega Veneta and Eyewear Stand Strong
On the other hand, Bottega Veneta stands out as a bright spot amid the challenging environment, reporting a 5% year-on-year revenue increase to €397 million. The brand’s double-digit growth in North America and Western Europe has helped sustain its strong performance, driven largely by continued high demand for its leather goods. Kering’s Eyewear division also achieved 4% growth, contributing to the group’s overall results.
Outlook—Challenges and Rebuilding Efforts
Kering’s Chairman and CEO François-Henri Pinault acknowledged the headwinds facing the luxury market but emphasized the group’s ongoing efforts to reform its structure and pursue long-term growth strategies. However, due to the larger-than-expected revenue decline in the third quarter, the group’s operating income for 2024 is expected to be limited to €2.5 billion.
While Kering continues to focus on cost-cutting measures and selective investments, the company is also intensifying its efforts to enhance the appeal of its brands. Nevertheless, concrete and effective strategies are needed to overcome the slowdown in the Asian market and the stagnation of its major brands, particularly Gucci.