The directly operated retail network of Kering experienced an 11 per cent drop on a comparable basis, mainly due to reduced store traffic. The revenue trends in Western Europe, North America, and Japan remained consistent with the fourth quarter of FY23, while the Asia-Pacific region saw a more significant decline.

The wholesale and other segment also faced a downturn, with revenues decreasing by 7 per cent on a comparable basis. This decline is part of Kering's ongoing strategy to enhance the exclusivity of distribution for its various luxury houses, the company said in a press release.

Gucci, one of Kering's flagship brands, faced a steep decline in its revenue, which stood at €2.1 billion for the quarter, marking a decrease of 21 per cent as reported and 18 per cent on a comparable basis. The brand's directly operated retail network saw a 19 per cent decrease, particularly impacted by significant losses in the Asia-Pacific region. Wholesale revenues also fell by 7 per cent on a comparable basis.

Yves Saint Laurent reported a revenue of €740 million, down 8 per cent as reported and 6 per cent on a comparable basis. However, the brand showed resilience in its directly operated retail network, which only saw a 4 per cent decrease, buoyed by strong performance in Japan, improvement in North America, and stability in Western Europe. However, wholesale revenues decreased significantly by 25 per cent, although royalties and other revenues increased by 27 per cent on a comparable basis.

Bottega Veneta showed a relatively stable performance in Q1 FY24 with a total revenue of €388 million, a slight 2 per cent decrease as reported but a 2 per cent increase on a comparable basis. Notably, the brand's directly operated retail network saw a 9 per cent increase, driven by strong growth in North America, Western Europe, and the Middle East, despite a slight decline in the Asia-Pacific region. Wholesale revenue, however, was down by 25 per cent on a comparable basis.

The revenue for Kering’s other houses, which includes brands like Balenciaga, totalled €824 million, down 7 per cent YoY as reported and 6 per cent on a comparable basis. The directly operated retail network of these brands saw a 3 per cent increase on a comparable basis, with Balenciaga showing improved trends in Western Europe and Japan, robust growth in North America, and resilient performance in the Asia-Pacific. Wholesale revenue, similar to other segments, decreased by 25 per cent on a comparable basis.

“Kering’s performance worsened considerably in the first quarter. While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our houses, starting with Gucci, exacerbated downward pressures on our topline. In view of this revenue decline, together with our firm determination to continue investing selectively in the long-term appeal and distinctiveness of our brands, we now expect to deliver sharply lower operating profit in the first half of this year. All of us are working tirelessly to see Kering through the current challenges and rebuild a solid platform for enduring growth,” said Francois-Henri Pinault, chairman and chief executive officer.

Fibre2Fashion News Desk (DP)