Kering slumps as Gucci revenue plunges 22% and group swings to 2025 loss

The French luxury conglomerate Kering SA reported a significant financial downturn on Wednesday as its flagship brand, Gucci, experienced a staggering 22% plunge in comparable revenue during the fourth quarter of 2024. This sharp decline in performance across major global markets led the group to forecast a substantial operating loss for the first half of 2025, reflecting the deepening challenges within the high-end fashion sector. The parent company, led by CEO François-Henri Pinault, attributed the volatility to a combination of cooling demand in the crucial Chinese market and a difficult transition period as Gucci attempts to move upmarket with new creative direction. The disappointing results highlight a widening gap between Kering and its primary rivals, such as LVMH and Hermès, who have managed to maintain higher levels of resilience despite a global slowdown in luxury spending. Gucci, which traditionally accounts for two-thirds of Kering’s operating profit, has struggled to regain its footing under the creative leadership of Sabato De Sarno. Investors have expressed growing concern over the brand's ability to reconnect with aspirational shoppers while simultaneously trying to attract a more exclusive, ultra-wealthy clientele during a period of high interest rates and geopolitical uncertainty. In response to the fiscal crisis, Kering executives emphasized a strategy focused on cost-cutting measures and a long-term overhaul of its distribution network to prioritize brand exclusivity. However, the immediate outlook remains bleak, with the group warning that full-year recurring operating income for 2025 could drop by nearly half compared to the previous year. This news sent Kering’s shares tumbling on the Paris stock exchange, as analysts readjusted their expectations for a recovery in the luxury goods market, which is currently grappling with normalized growth patterns following the post-pandemic boom.