Dolce & Gabbana CEO Could Look at IPO in Future, Priority Now Is a Stronger Business

Models present creations for Dolce & Gabbana Fall/Winter 2024/25 men's collection in Milan, Italy January 13, 2024. (Reuters)
Models present creations for Dolce & Gabbana Fall/Winter 2024/25 men's collection in Milan, Italy January 13, 2024. (Reuters)
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Dolce & Gabbana CEO Could Look at IPO in Future, Priority Now Is a Stronger Business

Models present creations for Dolce & Gabbana Fall/Winter 2024/25 men's collection in Milan, Italy January 13, 2024. (Reuters)
Models present creations for Dolce & Gabbana Fall/Winter 2024/25 men's collection in Milan, Italy January 13, 2024. (Reuters)

Dolce & Gabbana is not ready for an initial public offering but is prepared to consider it in the future, the Italian luxury group's chief executive said on Monday.

"We are open to looking at (a listing) but before that we want to consolidate our business," CEO Alfonso Dolce said, answering a question at the Milano Fashion Global Summit 2024.

"We have the social responsibility of so many families," he added, referring to the group's employees, and of those working in companies that supply it.

In July, Dolce had said the fashion company was ready to assess opening up its capital to new investors either through a listing or other routes, in an interview published Corriere della Sera's L'Economia weekly supplement.

Domenico Dolce and Stefano Gabbana founded the company in 1985 and they are still in charge of creative direction.

They have no direct heirs. Alfonso and Domenico Dolce are brothers.



Gucci-owner Kering's Shares Down 5% after Q1 Sales Disappoint

A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo
A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo
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Gucci-owner Kering's Shares Down 5% after Q1 Sales Disappoint

A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo
A model presents a creation by the Gucci Fall-Winter 2025/2026 collection during Fashion Week in Milan, Italy, February 25, 2025. REUTERS/STRINGER/File Photo

Shares of Kering traded down 5% in European morning trade on Thursday, after the group reported a first-quarter sales drop that was worse than analysts' expectations.

Kering after the market close on Wednesday posted a 14% decline in sales, with a 25% drop at flagship label Gucci, the latest signal the luxury sector faces another tough year.

The sales report confirmed "a weakening backdrop" since February, said analysts at Jefferies, noting "the uncertainties around reigniting Gucci's desirability remain plentiful".

The brand, which accounts for around two-thirds of group profits, is betting on in-house talent Demna to revive sales, but new designs will only arrive gradually at the end of the year, Reuters reported.

The French luxury group flagged worsening sales in North America and Western Europe and said it expected sales to continue to fall in double digits, percentage-wise, in the second quarter, before starting to improve.

This leaves the "heavy lifting" for the second half, which will likely depend on a recovery in Chinese demand, noted analysts at Bernstein.

Prospects for the luxury industry, which had pinned hopes on growth from the United States to help pull it out of a slump as the Chinese market remains weak, have been darkened by recession fears prompted by US President Donald Trump's tariff announcements.

As trade tensions have risen, Bellwether LVMH has fallen 23% and Burberry and Kering have both lost 30% since the start of the year. Hermes and Cartier-owner Richemont, viewed by analysts as better insulated from economic downturns because of their wealthier clientele, are up 1% and 3%, respectively.

First-quarter reports from Kering's larger rivals last week also reflected the sector's slowdown and disappointed investors, with sales at LVMH's fashion and leather goods division down 5% while Hermes, which routinely outpaces expectations with double-digit growth, posted a 7% rise.

Analysts at Deutsche Bank on Thursday lowered their 2025 earnings per share estimate for Kering this year by 13% to 8.65 euros ($9.84), citing the company's cautious outlook for the first half, and noting the slowdown in all regions except Asia was slightly worse than peers.

TD Cowen lowered sales forecasts for Gucci this year by 15% to a 20% decline.

The analysts added that Gucci, as well as another Kering label Yves Saint Laurent, were expected to be slower to raise prices to offset tariffs than peers. The Kering labels have a broader base of less-wealthy clients who are more reluctant to splash out in a choppy economic environment.

LVMH, meanwhile, has raised prices of some Louis Vuitton handbags and leather goods by around 4% according to Bernstein and Barclays, while Hermes said it will pass on the full effect of tariffs to shoppers in the United States on May 1.

US tariffs could include a 20% charge on European fashion and leather goods and 31% for Swiss-produced watches if fully applied, but Trump earlier this month paused most of his tariffs for 90 days, setting a general 10% duty rate instead.

The price hikes from Vuitton are "more than enough" to offset even 20% tariffs, said Bernstein.