No recovery for the Kering group for another two years

Looking at the 2024 financial year results, Gucci continues to weigh down the figures. The relaunch of the iconic Italian brand could be more complicated than expected and take longer.

Kering's efforts to turn around its flagship brand, which accounts for around half of the group's total turnover and more than two-thirds of its current operating income, have been impacted by the global slowdown in demand for luxury goods. Despite this, the group continues to take action to boost its flagship brand.

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The group's overall turnover, which had already fallen in 2023 (2%), fell further in 2024, reaching 17.2 billion euros in sales. While Gucci plunged (-21% on a comparable basis), Saint Laurent declined (-9%). The poor performance of these brands overshadowed the good results of other divisions, such as Kering Eyewear, which continues to thrive and posted an 8% increase in sales. The Italian fashion house Bottega Veneta is also growing, increasing 6%.

François-Henri Pinault commented on the results, explaining that the group had preferred to focus on long-term investments to maximise the desirability of the labels represented: ‘In a difficult year, we have accelerated the transformation of several of our Houses and acted with determination to consolidate our brands,’ he said in the official press release issued following the publication of the results.

Despite the optimistic statements, it can be seen that in the fourth quarter of 2024 alone, turnover is down -12% in both published and comparable data.

The Group is, therefore, now faced with the challenge of intensifying the initiatives necessary for the development and growth of its brands, Gucci in particular. These actions require particular vigilance in financial discipline, whether in terms of controlling the production chain and raw material costs, the choice of investments (Kering has started to favor diversified investments, especially in real estate), and the management of its balance sheet.