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Kering Warns on Annual 2024 Operating Profit as Gucci Sales Fall

This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)
This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)
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Kering Warns on Annual 2024 Operating Profit as Gucci Sales Fall

This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)
This photograph taken during a presentation press conference in Paris on March 22, 2013 shows the new name and logo of French luxury and retail group PPR which will become officially Kering after its approval by the annual general meeting to be held on June 18. (AFP)

French luxury goods group Kering warned on Wednesday its full-year operating income would almost halve after reporting a larger-than-expected drop in third quarter sales, as weak demand in China deepened the struggles of its main label Gucci.

Revenue for the group which also owns fashion brands Saint Laurent, Balenciaga and Bottega Veneta, was 3.79 billion euros ($4.08 billion), a 16% decline on an organic basis.

The figure was worse than an analyst consensus estimate of an 11% decline, according to a Barclays note.

Kering said its 2024 recurring operating income could be about 2.5 billion euros, following the larger-than-expected slowdown in the third quarter, compared with 4.75 billion euros a year earlier.

Kering's warning comes as the luxury sector suffers a slowdown, with luxury bellwether LVMH last week missing expectations and flagging a drop in Chinese consumer confidence to COVID-era lows, with a deterioration in demand for high end fashion over the quarter.

Sales at Gucci, which accounts for half of annual group sales and two-thirds of profit, continued to slide and were down 25% in the quarter, compared to analysts' consensus expectations for a 21% decline.

"We are executing a far-reaching transformation of the group, and at Gucci in particular, at a time when the whole luxury sector faces unfavorable market conditions," Kering Chair and CEO Francois Henri Pinault said in a statement.

Kering has been managing a broad overhaul of the century-old Italian fashion house, rebuilding top executive teams and introducing a new streamlined design style under the artistic direction of Sabato de Sarno, while pushing the products upmarket.

The group said in a statement that the overhaul of Gucci's leather goods category, with the introduction of a host of new products late in the quarter, was well underway.

Earlier this month, it named Stefano Cantino as CEO effective from January, replacing longtime Kering executive Jean-Francois Palus who held the role for an interim period since last year.

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Fashion

Paris Store to Part Ways with Shein After Ownership Change

This photograph shows a view of the Asian e-commerce giant Shein store at the Bazar de l'Hotel de Ville (BHV) department store in Paris on March 19, 2026. (AFP)
This photograph shows a view of the Asian e-commerce giant Shein store at the Bazar de l'Hotel de Ville (BHV) department store in Paris on March 19, 2026. (AFP)
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Paris Store to Part Ways with Shein After Ownership Change

This photograph shows a view of the Asian e-commerce giant Shein store at the Bazar de l'Hotel de Ville (BHV) department store in Paris on March 19, 2026. (AFP)
This photograph shows a view of the Asian e-commerce giant Shein store at the Bazar de l'Hotel de Ville (BHV) department store in Paris on March 19, 2026. (AFP)

French department store BHV Marais will end its partnership with Shein after its operating company said Tuesday it was selling the Paris outlet, following criticism of its deal with the Asian e-commerce giant.

The announcement comes after Shein in November opened its first permanent physical shop in BHV's flagship store, a move that sparked outcry over the brand's fast-fashion business model and environmental impact.

SGM, which has operated the landmark store opposite Paris City Hall since 2023, has sold it at a loss to a group of executives, including outgoing SGM CEO Karl-Stephane Cottendin, the two parties told reporters.

Cottendin, who will step down as SGM's chief executive following the deal, said Shein would "ideally" leave the store by Christmas, describing the decision to allow the retailer to open in BHV as a "strategic error".

A second BHV store west of Paris will also come under new management, while SGM will retain control of seven other locations, five of which have welcomed Shein this year.

Contractual commitments with Shein at the non-Paris stores will be "honored" pending a "long-term" review, SGM director Frederic Merlin said.

Merlin acknowledged having made "mistakes", adding that the sale of BHV was a "genuine plan for an effective takeover by serious people".

Founded in China in 2012 and now based in Singapore, Shein has faced criticism in several countries over working conditions at its suppliers and the environmental impact of its ultra-fast-fashion business model.

Around 100 brands left the BHV Marais following Shein's arrival, with management saying it was either over opposition to the Asian brand or over unpaid invoices linked to IT systems.

Earlier this month, France said it imposed two fines on Shein totaling more than 22 million euros ($26 million), citing problems with product traceability, environmental labelling and delivery times.

The penalties bring the total fines imposed by France against the Asian fashion giant to more than 210 million euros.

Fashion

Hugo Boss Shares Jump after Frasers' $2.3 Billion Takeover Bid

FILE PHOTO: Men's shoes are on display at the Boss store in London, Britain, May 30, 2024. REUTERS/Chris J. Ratcliffe/File Photo
FILE PHOTO: Men's shoes are on display at the Boss store in London, Britain, May 30, 2024. REUTERS/Chris J. Ratcliffe/File Photo
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Hugo Boss Shares Jump after Frasers' $2.3 Billion Takeover Bid

FILE PHOTO: Men's shoes are on display at the Boss store in London, Britain, May 30, 2024. REUTERS/Chris J. Ratcliffe/File Photo
FILE PHOTO: Men's shoes are on display at the Boss store in London, Britain, May 30, 2024. REUTERS/Chris J. Ratcliffe/File Photo

Shares in Hugo Boss rose about 7% on Thursday after Britain’s Frasers Group launched a $2.3 billion takeover offer for the German fashion brand.

Frasers, already the largest shareholder of Hugo Boss with a stake of just over 26%, is offering €38 per share in cash for the remaining shares, a 4.3% premium to Wednesday’s close, Reuters reported.

Hugo Boss said late on Wednesday the approach was not coordinated ⁠with the company ⁠and that its board would review the offer, which values the stake not yet owned by Frasers at about €1.98 billion ($2.3 billion).

The deal would bring Hugo Boss into the retail empire controlled ⁠by British billionaire Mike Ashley, whose Frasers Group owns Sports Direct and House of Fraser and holds stakes in Asos, Debenhams and Currys.

J.P. Morgan said the bid likely sets a near-term floor for the shares but flagged limited scope for further upside, adding it did not expect a rival bidder to emerge.

Hugo Boss, ⁠whose ⁠shares are about half their level of three years ago, has been struggling with weaker sales and is pursuing a turnaround strategy focused on store revamps, a streamlined product range and expanding women's wear.

By 0713 GMT, Hugo Boss shares were up 6.2% at €38.7, above Frasers' offer price, taking their year-to-date gains to 7.2%. Frasers shares fell 2.5%.

Fashion

Primark Names Lucy Slinger as Finance Chief Ahead of AB Foods Split

A Primark store is pictured in the Bullring shopping center in Birmingham, Britain, November 4, 2020. REUTERS/Andrew Boyers
A Primark store is pictured in the Bullring shopping center in Birmingham, Britain, November 4, 2020. REUTERS/Andrew Boyers
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Primark Names Lucy Slinger as Finance Chief Ahead of AB Foods Split

A Primark store is pictured in the Bullring shopping center in Birmingham, Britain, November 4, 2020. REUTERS/Andrew Boyers
A Primark store is pictured in the Bullring shopping center in Birmingham, Britain, November 4, 2020. REUTERS/Andrew Boyers

Fashion retailer Primark named Lucy Slinger as its chief financial officer on Thursday, strengthening its leadership team ahead of its split from Associated British Foods.

Slinger joins Primark from IKEA franchisee ⁠Ingka Group, where she ⁠has served as deputy CFO.

Prior to Ingka Group, she spent over two ⁠decades at Shell in a range of senior finance leadership roles.

Slinger's appointment follows that of Eoin Tonge as Primark chief executive and Filip Ekvall as chief commercial officer in March, Reuters reported.

⁠AB ⁠Foods said in April it would spin off Primark from its food businesses, telling investors that it will be better positioned to grow on its own.