Gucci's activity in China suffers after sales slowdown in Asia
Logo heavy luxury brands appear to be suffering in China as the latest results from Gucci owner Kering show a sales slowdown in Asia.
Gucci’s third-quarter sales were up 0.6 per cent on a comparable basis but “store traffic” in Asia was hit by its “strategy of exclusivity”. Kering, like rival LVMH which owns Louis Vuitton, has been worried their products have become too common. They have been raising prices and making their products more “exclusive” to improve sales.
Kering, which also owns Bottega Veneta and Saint Laurent, said overall sales for the quarter were up 3 per cent on a comparable basis at €2.5bn, below analyst consensus of €2.55bn.
It said sales of Gucci handbags were “particularly robust” driven by its new “no logo” leather lines, Bamboo Shopper and Lady Lock.
The group also owns struggling sportswear brand Puma. It has been attempting to turn around the brand and installed a new management team tasked with improving sales. Puma is part of its sport and lifestyle division that recorded sales down 0.9 per cent on a comparable basis.
François-Henri Pinault, chairman and chief executive officer at Kering, said: “Kering posted another quarter of growth, propelled by the luxury division's strong performance, notably in our own store network. With very healthy gross margins in our luxury brands and continued tight control of our operating expenses, we remain confident in our performances for the year as a whole.”
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