At the Hermès factory in Seloncourt (Doubs), October 4, 2013. BENOIT TESSIER / REUTERS
The danger is not yet at the door. But the poor economic climate in the third quarter of 2023 is also affecting the luxury goods industry. Sales figures published by the major French groups show that sales growth in bags, suits and perfumes is slowing for some and recording a much steeper decline for others.
The spectacular upswing in 2022 is clearly a long time ago. The consulting firm Bain & Company and the Italian Altagamma Foundation have already warned: “After the record of 2022, the global luxury market is expected to register a growth of 5 to 12% in 2023,” estimate their industry study published in June. LVMH confirmed a “return to normality” on October 10th.
The luxury group, which acts as a barometer for the luxury industry, published sales of 19.96 billion euros in three months this summer. This is 9% more than in the third quarter of 2022, at constant exchange rates. However, this growth is lower than the +17% in the first half of 2023. In this group founded by Bernard Arnault, sales of leather goods and fashion brands are no exception: they increased by 9% in the third quarter, after having increased by 20% in the first half was.
For French rival Kering, the landing is much more complicated. Sales of the group led by François-Henri Pinault fell by 9% at constant exchange rates to 4.46 billion euros in the third quarter of 2023. “Beyond the difficult macroeconomic environment and the decline in demand in the luxury sector,” the French group’s poor performance is reportedly linked to “the impact of decisions to strengthen the exclusivity” of the Kering Group’s brands, explained CEO François-Henri Pinault, in a Press release from Tuesday, October 24th.
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Kering is particularly suffering from Gucci’s bad period since 2020: the “new chapter” that the company is writing since the appointment of a new artistic director, Sabato De Sarno, at the beginning of 2023 and the “rationalization” of its distribution, said to be the distribution under the brand strengthen.
This luxury brand – which accounts for half of Kering’s global business in 2022 – reported a 7% decline in billings in the third quarter on a like-for-like basis and at comparable exchange rates compared to the same period last year. Since Gucci is one of the most profitable brands, this underperformance will inevitably impact the French group’s operating margin in 2023, Kering management agreed on Tuesday, October 24. Yves Saint-Laurent – the group’s other major subsidiary – is also showing signs of weakness. Sales fell 12% in the third quarter.
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Source : www.lemonde.fr