Gucci sales fall 6%, challenging Kering turnaround plan

Kering’s third-quarter sales at Gucci fell 6% to €1.29 billion, with weak store traffic in China weighing on the brand, whose sales have declined for more than three years. Sales at Gucci’s directly operated stores dropped 9%, while wholesale and licensing revenue increased; North America was comparatively resilient, and several Kering brands outside Gucci recorded growth. Group revenue declined 1% on a comparable basis, renewing doubts about a quick turnaround amid softer luxury demand. Kering plans to increase marketing and spending on customer experience, while continuing cost and store-network cuts: it has closed 105 stores so far this year and aims for at least 125. CEO Luca de Meo’s longer-term plan seeks to improve the group’s operating margin, but the company did not confirm whether it still expects to return to overall growth this year.