Luxury retail group Kering has warned on profits during the first half of the year as sales slipped at the luxury fashion house during its first quarter.
Kering, which owns brands including Gucci, Alexander McQueen, Yves Saint Laurent, Balenciaga and Bottega Veneta, posted group revenue during the first quarter of €4.50m (£3.87m) during the first quarter, a decline of 11% on a reported basis.
Revenue at Gucci, Yves Saint Laurent and Bottega Veneta dropped by 21%, 8% and 2% respectively. Revenue at the group’s other brands was down 7% to €824m (£708m).
Kering said that the decline at Gucci came as a result of a “sharp decline” in the Asia Pacific region, despite the brand’s new collections being “very well received”.
In terms of outlook, the group said it expects a drop of between 40% and 45% in operating income during the first quarter compared to the same period last year.
Kering said it aims to maintain a trajectory of “long-term profitable growth” and cement its status as “one of the most influential groups in the luxury industry”.
Kering chair and chief executive François-Henri Pinault said: “Kering’s performance worsened considerably in the first quarter. While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our houses, starting with Gucci, exacerbated downward pressures on our topline.
“In view of this revenue decline, together with our firm determination to continue investing selectively in the long-term appeal and distinctiveness of our brands, we now expect to deliver sharply lower operating profit in the first half of this year. All of us are working tirelessly to see Kering through the current challenges and rebuild a solid platform for enduring growth.”
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