- Written by Mariko Oi
- business reporter
image source, Getty Images
Gucci's Paris-based owner Kering said Gucci's sales were expected to fall 20% in the first quarter due to the economic slowdown in Asia.
The warning stands in contrast to rivals LVMH and Hermès, whose sales have remained strong.
Although the luxury goods market has grown over the past decade, sales have been less impressive in recent years.
Gucci is estimated to derive more than a third of its sales from China, where the economy is struggling.
Kering said in a statement that the profit warning “reflects the sharp decline in Gucci's sales, particularly in the Asia-Pacific region.” The company is scheduled to report its financial results on April 23rd.
Gucci accounted for two-thirds of group operating profit last year. Kering's other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta.
By comparison, larger rival LVMH, which owns Louis Vuitton, Moët & Chandon and Hennessy, had better-than-expected sales in 2023.
Hermès also achieved record annual sales last year and plans to give bonuses to all employees around the world.
The results show resilience in the luxury market, but Gucci is known for targeting young, ambitious shoppers who are vulnerable to economic pressures.
Last year, Kering changed top management at Gucci, appointing Jean-François Pallas as chief executive officer and Sabato de Sarno as creative director.
The first items in his Ancora collection were launched in mid-February.
Kering said in a statement that the collection has been “extremely well received.”
