Disappointing revenues come amid poor sales in the US and China, low store traffic, geopolitical uncertainties, and fierce competition against fast fashion labels.
As luxury shoppers in the US and China continue to hold back on purchases, luxury giant Kering sees its first quarter sales plunge 14%—more than what was expected. Its flagship label, Gucci, also suffers a serious blow, with revenues dropping a staggering 25%.
“As we had anticipated, Kering faced a difficult start to the year,” Kering chairman and CEO François-Henri Pinault said in a press statement. He added that they are “fully focused” on executing their action plans to reach their strategic and financial objectives and to strengthen the positioning of Kering in all its markets.
“We are increasing our vigilance to weather the macroeconomic headwinds our industry faces,” he continued. “I am convinced that we will come out stronger from the present situation.”
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The statement also mentioned that during the same period, the group closed 25 boutiques on a net basis, bringing its directly operated network to a total of 1,788 units. It looks like it won’t stop there as underperforming stores are as many as 50. It likewise flagged possible job cuts with no signs of improvement in sight.
With sales expected to keep falling by double-digit percentage rates next quarter, Kering executives also said they planned to “reduce redundancies.” “We are working on any duplicates that we can have in our organization,” finance chief Armelle Poulou said in a report on Reuters.
The Trump administration’s tariffs, coupled with ever increasing competition against fast fashion labels make things bleaker for Kering. This is especially true given the poor performance of Gucci, the biggest label in its stable.
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The statement mentioned that in the first quarter of 2025, Gucci’s revenue amounted to €1.6 billion, down 24% as reported and down 25% on a comparable basis, “against a backdrop of low store traffic.” Given the disappointing numbers, Gucci promises to further strengthen and update its product range. Its new handbag lines are well received, it added, and there’s the launch for the new Softbit line to look forward to.
Perhaps, there is no other person in Gucci—or Kering as a whole—who is under more pressure than newly appointed creative director Demna. The Georgian fashion designer’s appointment last March comes with enormous expectations, especially with how Gucci is doing poorly in the numbers game. The brand, after all, accounts for about two-thirds of Kering’s profits. Reuters report also mentioned that Denma’s appointment disappointed investors “who had hoped for a prominent external hire.”
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Demna, who was most recently the creative director of Kering stablemate Balenciaga, has already started working with Gucci’s teams, Kering executives said, but declined to say when his first collection will see the runway. Deputy CEO Francesca Bellettini said Demna’s new styles will arrive “gradually” as the company rushes to speed up production and deliveries. “You won’t have to wait until 2026 to see some of those products,” she added.
With regard to Kering’s other major labels, Yves Saint Laurent also saw a drop in sales, with revenue in the first quarter of 2025 amounting to €679 million, down 8% as reported and down 9% on a comparable basis. Bottega Veneta, however, saw a 4% increase in sales, with a total of €405 million in the first quarter of 2025. Meanwhile, revenue from the Kering Eyewear and Corporate segment amounted to €558 million, up 4% as reported and up 3% on a comparable basis.
