Crisis is a word often overused especially when it comes to fashion, because what really constitutes "a crisis"?
A major drop in sales, maybe? A popular luxury brand becoming the focal point of a child conspiracy scandal, perhaps? Or both?
For French luxury group Kering, it’s firmly the latter.
According to their latest financial reports, Gucci — the largest Kering-owned label — saw nearly a 7 percent drop in sales for Q4 2022 (a period Kering described as "a mixed quarter), and a 15 percent fall in China specifically as a result of ongoing coronavirus disruptions across the country, 4 percent more than analysts had first predicted.
While looking across 2022 as a whole reads a lot better from a Gucci perspective (revenues surpassed €10bn for the first time), this rapid decline across Asia (historically one of its biggest markets) will undoubtedly have bums squeaking.
Despite the uncertainty surrounding the brands, at the Kering press conference on February 15, the group’s Chief Executive, François-Henri Pinault, remained upbeat: “We’ve seen a remarkable inflection compared to the trajectory in December, which was very affected notably by the policies and the health crisis in China.
“Chinese new year [sales] went well, better than we had anticipated. The malls are packed, people have moved on to other things,” he added.
Gucci — who appointed Sabato De Sarno as its new creative director last month – wasn’t the only major talking point to come from Kering’s press conference, as Balenciaga’s ongoing troubles weighed in on 2022 figures, too.
The Spanish house found itself at the centre of a widely-reported child conspiracy scandal towards the end of last year, one that’s naturally seen its figures plummet, as expected.
As Balenciaga prepares for its fashion week return in Paris in March, the house last week revealed that it and Kering's charitable branch (the Kering Foundation) were entering a partnership with the National Children's Alliance.
Whether this pledge be enough for the house to return to the heady heights on 2021 remains to be seen, although tip-toeing back into the fashion schedule undoubtedly suggests its intentions are certainly to do so.
Of course for a conglomerate like Kering, their ongoing success rests on the shoulders of more than just two of its names, but when it’s two of their most successful in recent years, it’ll certainly have them sweating. Crisis point reached? Not just yet.
