The warning stands in stark contrast to competitors Hermès and LVMH, whose sales have held steady.
Although the luxury market has expanded over the last ten years, recent sales have not been as strong.
An estimated 33% of Gucci’s sales come from China, a country that has been experiencing economic difficulties.
The profit warning, according to a statement from Kering, “reflects a steeper sales drop at Gucci, notably in the Asia-Pacific region”. On April 23, the company is expected to release its financial results.
Two-thirds of the group’s operating income in the previous year came from Gucci. Other trademarks owned by Kering are Yves Saint.
By contrast, its larger rivals—owners of Hennessy, Moët & Chandon, and Louis Vuitton—reported better-than-expected sales for 2023.
In addition, Hermes celebrated its record-breaking yearly sales last year and announced its intentions to give bonuses to every worker around the globe.
Even though their findings demonstrated the luxury market’s durability, Gucci is well-known for attracting younger, aspirational customers who are more susceptible to financial strains.
