Luxury fashion conglomerate Kering has reported a significant downturn in its financial performance for the fiscal year 2024 (FY24), with revenues falling 12% to €17.19bn ($17.75bn).
The company, which owns high-end brands Gucci and Yves Saint Laurent, attributed the revenue contraction to a 13% drop in sales within its directly operated retail network, including e-commerce platforms.
This was primarily due to reduced foot traffic in stores, spurred by unfavourable market conditions.
Gucci experienced a revenue fall of 23%, down to €7.7bn as reported, and a 21% decrease on a comparable basis.
Yves Saint Laurent saw its revenue shrink by 9% to €2.9bn, a figure consistent in both reported terms and on a comparable basis.
Bottega Veneta offered a glimmer of hope with a revenue increase of 4% as reported and 6% on a comparable basis, reaching €1.7bn.
In 2024, revenue from Balenciaga, Alexander McQueen, Brioni, Boucheron and jewellery houses totalled €3.2bn, reflecting an 8% decline as reported and a 7% decrease on a comparable basis.
Kering's wholesale revenue for its houses saw a substantial 22% decline on a comparable basis as the company intensified efforts to amplify the exclusivity of its distribution channels.
Overall wholesale and other revenue at group level dipped 9% on a comparable basis.
The company's financial health also took a hit in terms of profitability. Recurring operating income plummeted 46%, totalling €2.6bn for the year, while the recurring operating margin contracted from 24.3% in 2023 to 14.9% in 2024.
Net income attributable to Kering was recorded at €1.1bn for FY24, with recurring net income attributable reaching €1.3bn.
Kering chairman and chief executive officer François-Henri Pinault said: “In a difficult year, we accelerated the transformation of several of our houses and moved determinedly to strengthen the health and desirability of our brands for the long term.
“Across the group, and at Gucci first and foremost, we made critical decisions to raise the impact of our communications, sharpen our product strategies and heighten the quality of our distribution, all in the respect of the creative heritage that distinguishes our brands.
“We secured our organisation, made key hirings, sped up execution and intensified the efficiency of our operations. Our efforts must remain sustained and we are confident that we have driven Kering to a point of stabilisation, from which we will gradually resume our growth trajectory.”
In the fourth quarter of FY24, the group posted a 12% revenue decline both as reported and on a comparable basis.
The directly operated retail network saw sales fall by 13% on a comparable basis, despite witnessing some sequential improvements across various regions excluding Japan.
The group is intensifying efforts to support the growth of its houses while focusing on actions to improve efficiency. These include maintaining financial discipline, controlling costs, being selective with investments and managing the balance sheet.
