A slight increase in group performance in key sectors, including China and the US, has led investors to bear the impact of fourth quarter sales of luxury conglomerate Kaling, which was negatively affected by a sustained decline in flagship brands. It encouraged it, the company said Tuesday.
Early trading saw a 5% increase in stocks in the French group as investors grabbed optimism that the business had reached a turning point.
Kering’s sales fell 12% from October to December on a comparable basis, driven by a 24% decline at Gucci, according to the visible alpha consensus reported by UBS. It decreased in line with forecasts.
Kering CEO François-Henri Pinault said in a statement that the group will reach a stabilization stage and will gradually begin to resume growth. He also confidently stated that Gucci is unquestionable about the brand’s future success.
Stefano Cantino has fired Gucci designer Sabato De Sarno since taking over as CEO of Gucci in January.
The global decline in demand for luxury goods has hampered Kering’s attempts to revive Gucci with a new minimalist design philosophy from de Sarno, who took over the role two years ago.
According to consulting firm Bain & Company, luxury sales last year fell internationally by 2% due to China’s real estate crisis, Gucci’s key market, with industry sales rates being the slowest in years.
