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Kering Says Investments May Hit Margins as Gucci Sales Decline

(FILES) A photo taken on June 18, 2013 shows the new name and logo of French luxury and retail group PPR , Kering. (Photo by FRANCOIS GUILLOT / AFP)
(FILES) A photo taken on June 18, 2013 shows the new name and logo of French luxury and retail group PPR , Kering. (Photo by FRANCOIS GUILLOT / AFP)
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Kering Says Investments May Hit Margins as Gucci Sales Decline

(FILES) A photo taken on June 18, 2013 shows the new name and logo of French luxury and retail group PPR , Kering. (Photo by FRANCOIS GUILLOT / AFP)
(FILES) A photo taken on June 18, 2013 shows the new name and logo of French luxury and retail group PPR , Kering. (Photo by FRANCOIS GUILLOT / AFP)

Kering posted a 4% decline in fourth quarter sales, hit by slowing demand for fashion as it seeks to turn around its top brand Gucci, and cautioned that investments in its labels could affect margins in 2024.
Sales at the French group, which also owns fashion brands Bottega Veneta and Balenciaga and jeweler Boucheron, fell to 4.97 billion euros ($5.36 billion) in the final three months of the year, despite improvement in the United States and Europe. That was broadly in line with expectations for 4.94 billion euros, according to consensus estimates cited by RBC.
After a post-pandemic splurge that fueled stellar sales growth for high end fashion companies over two years, consumers have been reining back purchases, particularly younger, less wealthy clientele that are more vulnerable to rising inflation.
"We will continue to invest in our brands in the long term -- yes, that means in the coming year our margins will be less supported than in previous years," Kering chief financial officer Armelle Poulou told reporters, according to Reuters.
"We think it’s the good strategy to ensure growth in the long term for our brands," she added.
Kering’s efforts to revive sales at its star label Gucci, which has lagged rivals over the past two years, have been complicated by the slowing demand.
Barclays' analysts project industry-wide growth from high end luxury companies of 5% this year, down from 9% last year and double digit growth the previous two years.
Gucci's performance improved over the fourth quarter, down 4% year-on-year, compared with a 7% decline in the third quarter. The label's recurring operating margin stood at 33.1% for the full year, lower than its level of 35.3% in the first half.
"Gucci is not performing worse than expected which is a relief," said Piral Dadhania, analyst with RBC, noting that the focus would now turn to Gucci's margin outlook.

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Fashion

Victoria Beckham Shows Sheer Dresses and Sharp Suits at Paris Fashion Week

FILED - 03 September 2019, United Kingdom, London: David Beckham (L), Victoria Beckham and Brooklyn Beckham arrive at the GQ Men of the Year Awards 2019 in association with Hugo Boss at the Tate Modern. Photo: Matt Crossick/PA Wire/dpa
FILED - 03 September 2019, United Kingdom, London: David Beckham (L), Victoria Beckham and Brooklyn Beckham arrive at the GQ Men of the Year Awards 2019 in association with Hugo Boss at the Tate Modern. Photo: Matt Crossick/PA Wire/dpa
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Victoria Beckham Shows Sheer Dresses and Sharp Suits at Paris Fashion Week

FILED - 03 September 2019, United Kingdom, London: David Beckham (L), Victoria Beckham and Brooklyn Beckham arrive at the GQ Men of the Year Awards 2019 in association with Hugo Boss at the Tate Modern. Photo: Matt Crossick/PA Wire/dpa
FILED - 03 September 2019, United Kingdom, London: David Beckham (L), Victoria Beckham and Brooklyn Beckham arrive at the GQ Men of the Year Awards 2019 in association with Hugo Boss at the Tate Modern. Photo: Matt Crossick/PA Wire/dpa

Victoria Beckham presented sculptural gowns in sheer fabrics, tightly cut suits and voluminous coats in Paris on Friday for a fall/winter 2026 collection that played with shape and texture.

Dresses in dark blues and greens featured bodices of three-dimensional rosettes, a motif that repeated across skirts, contrasting with sober suits in navy and ‌black, said Reuters.

Large overcoats ‌were paired with sheer ‌white ⁠skirts or drainpipe trousers, ⁠while knitwear had giant collars and cut-outs revealing the models' backs.

According to the show notes, the collection was inspired by the work of Art Deco artist Tamara de Lempicka, famous for ⁠her cubist portraits of aristocrats in ‌sumptuous clothing.

Victoria Beckham's ‌husband David and the couple's children Romeo, Cruz, ‌and Harper were on the ‌front row. Their eldest, Brooklyn, was conspicuously absent after he went public in January with accusations against his parents, laying bare a family ‌feud for the first time.

Beckham founded her brand, which sells ⁠dresses ⁠between $950 and $2,500, in 2008 and launched Victoria Beckham Beauty in 2019.

Guests at the show were gifted bottles of her recently launched perfume, Portofino '97, inspired by a holiday the British couple took when they were still a secret item.

Paris Fashion Week, which started on Monday and runs through March 11, features big-name brands including Chanel, Dior, Hermes, Louis Vuitton, and Saint Laurent.

Fashion

Italy's Agnona Brand: Lamb among the Fashion Wolves

Italy's Agnona Brand: Lamb among the Fashion Wolves
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Italy's Agnona Brand: Lamb among the Fashion Wolves

Italy's Agnona Brand: Lamb among the Fashion Wolves

At Milan Fashion Week, headlines go to splashy names, over-the-top fashions and celebrities posing by catwalks.

But behind the scenes, Italy's smaller and medium-sized brands, the often family-owned lifeblood of the industry, are doggedly defending their craft, striving to keep alive long traditions of excellence.

One of them, Agnona, began in 1953 as a wool mill in Italy's northern Piedmont region, producing luxurious textiles in natural fabrics like cashmere, lambswool and angora that supplied top haute couture houses in Paris, from Christian Dior to Givenchy to Yves Saint Laurent.

Acquired in 1999 by the Ermengildo Zegna Group, Agnona switched from textiles to apparel and was sold in 2020 to Zegna family members Stefano Aimone, the chief executive and creative director, and his father Roberto.

Agnona, which is opening its first flagship store in Milan next month, envisions a global network of owned and franchised stores in future.

Stefano Aimone sat down with AFP to explain the challenges facing smaller names amid competition from the big fashion conglomerates, changes in consumer habits and the race towards retail.

- 'Overwhelmed by demand' -

"If you want to aim for quality and certain types of craftsmanship you have to stay here in our Italian boot. But many companies have closed. Many closed because of Covid, post-Covid they were absorbed into larger groups because costs went up, prices fluctuated, they had periods of no sales -- no work at all -- followed by excess work. Financially they didn't have the reserves.

"The businesses that remain are now extremely overwhelmed by demand from the big French groups and the Italian brands.

"The problem isn't just cut-and-sew, it's also the production of materials, because everything cascades down... the dye houses that are still around are clogged up, which creates delays, and delays weaken the quality of the entire industrial process."

- 'Made in Italy' -

"I'd say 'Made in Italy' is becoming relatively less important to them (customers); the customer now identifies more with the brand itself, with its values, with what the brand represents...

"Made in Türkiye, Made in Italy, Made in France -- it can be important, but it's definitely not as important as it once was, because brands have been very active in communicating many other values they embody, which provide justification beyond geography.

"And in a way that's right, because a brand isn't just its product -- it's also what it stands for and what it does beyond the product itself."

- 'Sowing seeds' -

"We're just under 15 million euros in revenue but we expect to reach 20 million and beyond within three years.

"We still have many markets that we haven't even started talking to, for example, all of China, the entire Middle East, all of Latin America, the whole APAC region including Australia.

"Since we took over the brand, there have been years of rebuilding: not only rebuilding our premises -- the industrial site and the headquarters -- but working on the collection.

"We introduced menswear, so we focused heavily on internal work, and we didn't necessarily want to push revenue right away. Because if you go out to market without a solid product, you risk ruining everything you're trying to achieve -- it can be counterproductive.

"So those were years of sowing seeds, and now that we're ready, we're beginning to address the global market."

Fashion

Stella McCartney Marks Year of the Horse with Equestrian Paris Fashion Week Show

Models present a creation by Stella McCartney for the Women's Ready to Wear Fall/Winter 2026-2027 collection fashion show as part of the Paris Women Fashion Week, in Paris, on March 4, 2026. (AFP)
Models present a creation by Stella McCartney for the Women's Ready to Wear Fall/Winter 2026-2027 collection fashion show as part of the Paris Women Fashion Week, in Paris, on March 4, 2026. (AFP)
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Stella McCartney Marks Year of the Horse with Equestrian Paris Fashion Week Show

Models present a creation by Stella McCartney for the Women's Ready to Wear Fall/Winter 2026-2027 collection fashion show as part of the Paris Women Fashion Week, in Paris, on March 4, 2026. (AFP)
Models present a creation by Stella McCartney for the Women's Ready to Wear Fall/Winter 2026-2027 collection fashion show as part of the Paris Women Fashion Week, in Paris, on March 4, 2026. (AFP)

Stella McCartney, known for her commitment to animal rights and sustainability, put horses at the center of her eponymous brand's Paris Fashion Week show set in a riding hall in Paris' Bois de Boulogne.

Five black horses and five white horses charged in and began performing an intricate equestrian choreography, walking in circles and weaving around each other, before the first ‌models emerged on ‌an oval catwalk surrounding the ‌sandy ⁠ring.

The winter 2026 ⁠collection continued the equestrian theme, with thigh-high riding boots, and suit trousers or jeans fashioned into stirrup pants and paired with bright preppy sweatshirts.

"There's a lot of new innovations in the show," McCartney told Reuters in an ⁠interview after the show. "Everything's plant-based, vegan, so ‌there are no ‌animal glues, there's no dead animals.

"That's why I always ‌like to sort of remind people and celebrate ‌and bring animals into the conversation," she added, saying the show also honored the Lunar New Year of the Horse.

Dresses and skirts covered ‌in plastic-free sequins featured hip bustles, pleats and bows, while multicolored crochet scarves ⁠provided a ⁠pop of color to tailored suits.

Stella McCartney, founded 25 years ago, became fully independent once more last year after McCartney bought the minority stake held by LVMH back from the luxury group.

A few seats down from Stella's father, former Beatle Paul McCartney, LVMH heir Antoine Arnault was among the front row guests at the show, seated next to his wife, model Natalia Vodianova.