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In the news: CEO
- Gucci sales are expected to plummet nearly 20 percent in the current first quarter compared to a year ago.
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The root cause is a deep dip in the
Asia Pacific region. Analysts say this indicates that Gucci's fashion items are selling worse than anticipated inChina .
The stock market reaction:
Out of favor
The big question: Is this a Gucci problem, or is all luxury brands in
- That the malaise at
Kering infectedLVMH shares only temporarily suggests the former. According to the brokerage house Jefferies, Gucci no longer has the same resonance with Chinese consumers as before. -
There is a glimmer of hope, though. Since last year,
Sabato de Sarno has been the new creative director at Gucci, replacingAlessandro Michele . De Sarno's first collection, which has a calmer style than his predecessor, has been well received, according toKering .
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Still, some analysts see a macro trend in the Gucci figures. At Citi, they value
Kering's warning as "a rather worrying signal for the luxury goods sector." London analysts point out that earlier British luxury house Burberry also had to revise downward its forecasts for the Chinese market.-
All this may indicate that
China's upper middle class is experiencing a recession of sorts, forcing them to cut corners and postpone "aspirational" purchases - such as a Gucci bag.China's economy has been hit by a real estate crisis for some time.
To look forward to: Upcoming quarterly figures from European luxury companies are going to shed more light on how common the waning popularity of expensive European items is in
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