Paris, France– French luxury giant Kering said Thursday its sales and net profit fell in 2023, warning its investment strategy will weigh on results this year as it refocuses its business around its flagship brand Gucci.
Kering, whose other houses include Yves Saint Laurent, Balenciaga and Bottega Veneta, reported a 17 percent drop in net profit to 2.98 billion euros ($3.2 billion).
Sales retreated four percent to 19.57 billion euros.
“In a trying year for the group, we strengthened our organization and took significant steps to further enhance the visibility and exclusivity of our Houses,” chief executive Francois-Henri Pinault said in an earnings statement.
“We are focused on revitalizing Gucci, leveraging the unique blend of craftsmanship, Italian heritage, and modernity that characterizes this iconic House,” he said.
At Gucci, a brand famous for its leather handbags, sales dropped six percent to 9.9 billion euros — accounting for half of Kering’s revenue.
Creations by Gucci’s new creative director Sabato de Sarno, who was appointed in January 2023, will go on sale in the coming weeks, said Kering chief financial officer Armelle Poulou.
Kering also changed Gucci’s management last year, appointing deputy CEO and Pinault confidant Jean-Francois Palus to replace Marco Bizzarri, who had led the brand since 2015.
Among other brands, Yves Saint Laurent sales were down four percent at 3.18 billion euros last year while Bottega Veneta slumped five percent to 1.6 billion euros.
Looking ahead, Kering warned that its investment strategy will weigh on the group’s full-year operating income.
“In a market environment that remains uncertain in early 2024, our continuing investments in our Houses will put pressure on our results in the short term,” Pinault said.
The company also cited “ongoing economic and geopolitical uncertainty”.