Luxury group Kering announced on Thursday that net profit would fall by 17% in 2023, to €2.98 billion, and that sales would fall by 4% to €19.57 billion, as the group restructures its flagship brand Gucci.

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For 2024, “in a context where growth in the sector is expected to continue to normalise,” the impact of Kering’s investment strategy “will weigh on the Group’s annual recurring operating income (…), which is expected to be lower than the level published in 2023, particularly in the first half of the year,” says the press release.

“In what has been a difficult year for the Group, we have strengthened our organisation and taken decisive action,” said CEO François-Henri Pinault, quoted in the press release.

“We are committed to revitalising Gucci,” he added, saying he was “confident” about the long term in view of the “experience acquired during the group’s remarkable development over the last decade.”

We are deploying a strategy of “elevation” (moving upmarket) “which implies continuing to invest in our brands over the long term,” explained Kering’s CFO Armelle Poulou, in a telephone conversation with press agencies.

“This is a good strategy to ensure sustainable, long-term growth,” she added.

Sales at Gucci, which is in the midst of a turnaround process and accounts for more than half of Kering’s turnover, fell by 6% to €9.9 billion. The designs of Sabato de Sarno, who succeeded Alessandro Michele in January 2023, will be put up for sale “in the coming weeks,” according to Poulou.

“Today, Gucci needs to find new energy and new ideas to excite consumers,” Luca Solca, an analyst at Bernstein, told AFP in mid-January.

In 2023, Kering has also changed the management of Gucci, placing “for a transitional period” one of François-Henri Pinault’s closest collaborators, Jean-François Palus, Kering’s deputy general manager, at the head of the brand.

Kering’s other brands also suffered in 2023. Yves Saint Laurent sales fell by 4% to €3.18 billion. Bottega Veneta posted sales down 5% to €1.6 billion.

In the “other houses” section, Balenciaga, which suffered, particularly on the American market, from an inappropriate advertising campaign, posted a 9% fall in sales to €3.5 billion.

Only Kering Eyewear, which specialises in luxury eyewear, reported a 38% increase in sales to €1.6 billion.