The French luxury giant Kering crosses one of its most delicate stages after reporting a 14% drop in its sales of the first quarter of 2025, mainly dragged by the 25% collapse in Gucci, its star brand.
In the midst of a challenging global panorama for the luxury sector -placed specifically by the deceleration of consumption in China and the United States, as well as the impact of new tariffs -the company faces a growing pressure to restructure its business model, reduce costs and accelerate the creative renewal of Gucci, whose new proposals still fail to return its old brightness that came to position it as one of the most relevant marks inside of the industry.
Given the disastrous results of the 1T, Kering said that he foresees that his sales continue to fall in double digit in the second quarter, with possible improvement in the second half of the year, depending on the demand in China, since Asia remains as one of its most stable markets in the face of a strong deterioration of sales in North America and Western Europe.
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Kering, the most affected by the deceleration of the luxury market
Other companies, such as LVMH, Hermès and Richemont, although they reported falls of 23%, 1% and 3% respectively, they are not compared to the loud Kering figures, who heads the difficult year that luxury brands are going through before global commercial uncertainty, since their actions have already lost more than 60% of their value since March 2024, pressured by the crisis facing the crisis.
Given this gloomy panorama, analysts cut their forecasts for both companies due to their lower capacity to raise prices and their customer base that have become more sensitive to the economic environment, exacerbated by US tariff policies.
According to Alpha and HSBC visible, the falling and Gucci falls are expected to be smaller during the second quarter with -9.7% and -19% respectively, however, the flagship brand does not show protrudes signs of recovery, since a strong decrease in traffic in its stores is reported.
Another sign that could give hope within the Gucci crisis, is its new creative director, Demna Gvasalia, who will officially begin in July, but his designs will arrive gradually before 2026, which leaves the resurgence of the brand in a more complex environment.
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