Kering shares plunged after the French luxury group warned that sales at its Gucci brand have fallen about 20 per cent in the first quarter as its brash look loses favour with Chinese shoppers.
“Gucci has been encountering some company-specific problems for a few quarters, but this update will raise further worries about the state of consumer spending and China’s economy,” analysts at Vital Knowledge wrote in a note to clients.Kering’s pain comes amid a cooling market for high-end goods and in particular weak demand in China. The Asia-Pacific region, excluding Japan, made up 35 per cent of group revenue last year, more than Western Europe and North America.
“The jury is out on whether the Chinese will like the Sabato De Sarno quiet luxury,” analyst Luca Solca and colleagues at Bernstein said, referring to the current trend for more understated looks.
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