The French luxury conglomerate Kering revealed on Thursday that its net profit and sales declined in 2023 and that its investment strategy will have an impact on its performance this year as it restructures its operations around its main brand, Gucci.
Yves Saint Laurent, Balenciaga, and Bottega Veneta are among the houses owned by Kering, which revealed a 17% decline in net profit to 2.98 billion euros ($3.2 billion).
Sales dropped 4% to a total of 19.57 billion euros.
“In a trying year for the group, we strengthened our organization and took significant steps to further enhance the visibility and exclusivity of our Houses,” chief executive Francois-Henri Pinault said in an earnings statement.
“We are focused on revitalising Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterises this iconic House,” he said.
At Gucci, a brand famous for its leather handbags, sales dropped six percent to 9.9 billion euros — accounting for half of Kering’s revenue.
According to Armelle Poulou, chief financial officer of Kering, creations by Gucci’s new creative director Sabato de Sarno, who was hired in January 2023, will go on sale in the upcoming weeks.
Last year, Gucci’s administration was also altered by Kering, who named Jean-Francois Palus, a close confidant of Pinault, as deputy CEO in lieu of Marco Bizzarri, who had headed the company since 2015.
Yves Saint Laurent saw a 4% decline in revenue last year, totaling 3.18 billion euros, while Bottega Veneta saw a 5% decline to 1.6 billion euros.
Looking ahead, Kering cautioned that the group’s operating profitability for the entire year will be impacted by its investment strategy.
“In a market environment that remains uncertain in early 2024, our continuing investments in our Houses will put pressure on our results in the short term,” Pinault said.
The company also cited “ongoing economic and geopolitical uncertainty”.
