Tip of the iceberg? Fears for the luxury sector as Gucci posts lower-than-expected 1Q sales

Tip of the iceberg? Fears for the luxury sector as Gucci posts lower-than-expected 1Q sales

Kering’s flagship brand, Gucci has posted lower-than-expected sales for the first quarter of fiscal 2016.

Sales climbed just 3.1 percent, below analysts’ predictions of a 5 to 6 percent rise and down from the 4.8 percent increase achieved by the brand last quarter.

The slowdown has been attributed to a general malaise across the luxury sector, caused by a drop in tourist spending at traditionally high-traffic destinations such as Hong Kong, Paris, Milan and Macau.

Other brands in Kering’s portfolio suffered a similar fate, with Bottega Veneta’s sales diving 8.3 percent and Balenciaga and Boucheron also struggling in the face of dropping tourist arrivals to France after the Paris attacks in November. Only Yves Saint Laurent bucked the trend with 26.5 percent growth.

“Kering’s solid first-quarter 2016 performance in a challenging market environment is testimony to our focus on driving organic growth,” François-Henri Pinault, Chairman and Chief Executive Officer said in a statement. “We are confident that we can extend our growth trajectory over the full year thanks to our multi-brand model, our continued strict operating and financial discipline, and the top-quality work of all our teams.”

 

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