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Italian Fashion House Valentino Suffers Drop in Profit in 2023

The logo of fashion house Valentino is seen outside a shop in Milan, Italy, April 8, 2024. REUTERS/Claudia Greco
The logo of fashion house Valentino is seen outside a shop in Milan, Italy, April 8, 2024. REUTERS/Claudia Greco
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Italian Fashion House Valentino Suffers Drop in Profit in 2023

The logo of fashion house Valentino is seen outside a shop in Milan, Italy, April 8, 2024. REUTERS/Claudia Greco
The logo of fashion house Valentino is seen outside a shop in Milan, Italy, April 8, 2024. REUTERS/Claudia Greco

Operating profit at Italian fashion house Valentino dropped 18% last year, to 99 million euros ($105.7 million), the company said on Tuesday.
Last year French luxury group Kering, which is struggling to revive sales at its star brand Gucci, bought a 30% stake in Valentino, with an option to purchase the whole of company's share capital by 2028.
Valentino added its 2023 revenues dropped 3% at constant exchange rate, to 1.35 billion euros ($1.44 billion).
Earlier this year Valentino hired former Gucci designer Alessandro Michele as creative director, after the departure of longtime incumbent Pierpaolo Piccioli.
Direct sales, which include e-commerce and represents 66% of total sales, rose 3% last year, boosted by a positive performance in Asia Pacific and Japan, the company said.
The second half of the year was challenging for the European market, while the Americas showed "encouraging signs" in the same period, the fashion house added.

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Fashion

Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
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Kering Posts 11% Drop in Q2 Sales, Sees Weak Second Half

The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)
The logo of luxury brand Gucci is seen in Tokyo on June 22, 2021. (AFP)

Kering reported a bigger-than-expected drop in second-quarter sales and forecast a weak second half, as the French luxury group struggles to revive its key label Gucci and worries grow about a prolonged downturn in high-end spending.

Sales at the French luxury group which owns labels Gucci, Boucheron and Balenciaga, fell to 4.5 billion euros ($4.9 billion), an 11% drop on an organic basis, which strips out currency effects and acquisitions.

The figure was below analyst expectations for a 9% drop, according to a Visible Alpha consensus.

It also said second-half operating income could fall by around 30%, following a 42% drop in the first half.

Sales at Gucci fell 19%, showing no improvement from the first quarter, and below analyst expectations for a 16% decline, according to a Visible Alpha consensus.

Kering has been revamping Gucci, the century-old Italian fashion house which accounts for half of group sales and two-thirds of profit.

Minimalist designs from new creative director Sabato de Sarno, which began trickling into stores earlier this year, are key to the design reset and push upmarket, in a bid to cater to wealthier clients who are more immune to economic headwinds.

Kering chief financial officer Armelle Poulou told reporters that the designs had been well received and the rollout was on track.

But the efforts have been complicated by a downturn in the global luxury market, while China's rebound - traditionally Gucci's most coveted market - was clouded by a property crisis and high youth unemployment as Western markets came down from a post-pandemic splurge.

Earnings from sector bellwether LVMH on Tuesday missed expectations as sales rose 1%, offering few signs that a pickup is around the corner, sending shares in luxury goods companies down on Wednesday. Kering traded at its lowest level since 2017.