-- Kering SA shares plunged after the French luxury group warned that sales at Gucci, its biggest brand, have fallen about 20% in the first quarter.Nvidia Looks to Extend AI Dominance With New Blackwell Chips
“Gucci has been encountering some company-specific problems for a few quarters, but this update will raise further worries about the state of consumer spending and China’s economy,” analysts at Vital Knowledge wrote in a note to clients.Overall, comparable sales at Kering, which also owns labels like Yves Saint Laurent and Balenciaga, will be down about 10% for the period, the company said.
“The jury is out on whether the Chinese will like the Sabato De Sarno quiet luxury,” analyst Luca Solca and colleagues at Bernstein said, referring to the current trend for more understated looks. In the meantime, Kering has been active on the acquisition front, buying fragrance maker Creed as well as a 30% stake in Valentino. Earlier this year, it announced a purchase of a building on Manhattan’s Fifth Avenue for $963 million as the hunt for trophy retail assets heats up among luxury players. Yet none of these deals is transformational, leaving the company heavily dependent on Gucci for now.