KERING sales declined as the crisis deepened in Gucci

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Sales in the French luxury KERING group decreased in the first quarter, driven by a decline in demand in Gucci, confirming the size of the transformation facing its new creative manager.

King, who also owns St. Laurent and Butja Veneta, has reported a 14 % decrease on an annual basis in the sales of the first quarter to 3.9 billion euros. The weak performance was driven by a 25 percent slope in similar sales in Gucci to 1.6 billion euros.

KERING, which is controlled by the billionaire Pinol family, has failed to ignite its largest brand, as sales decreased by double percentage for more than a year.

The brand enjoyed a multi -year boom before the epidemic, but the selective bohemian aesthetic fell from the fashion.

In an attempt to circumvent her fortunes, KERING mixed designers, provided more precise designs and moved to sell more products through her own stores, instead of wholesalers.

Luka Solka, a Bernstein analyst, said that King’s results confirmed that “the Revival of Gucci has not yet appeared,” adding that softening the luxurious demand would make a more difficult transformation.

Demna Gvasalia was appointed as Creative Director of Gucci, last month, It ignited the sale process In KERING shares.

Analysts asked whether the former creative director of Balenciaga, professionally known as Demna, was at the level of the task of circumventing the brand’s wealth.

Attempts in an industry that are already suffering from a decrease in luxurious demand will be held in the main markets of the United States and China. The hopes of recovery by the United States this year It has been resolved By President Donald Trump’s wrong trade.

“The global environment does not weaken our intention to achieve our goals, including in Gucci,” said Bullo’s financial manager in a call with investors on Wednesday, adding that Craring expects another decrease in numbers sales in Gucci in the second quarter.

Analysts said it would take at least for at least a year to revive Gucci, which generates two -thirds of KERING and half of its sales.

Polo said that King is working to reduce costs in ways that did not weaken sales. The group closed 25 Gucci stores in a quarter, adding to 10 stores closed in the previous quarter.

A 14 percent decrease in the first -quarter sales of KERING was more expected than Citibank analysts and Barclays, who estimated an annual decrease by 10 percent and 12 percent, respectively.

KERING was forced to release Multiple profit warnings last year. Group shares have lost 45 percent of their value in the past 12 months.