Kering SA said Wednesday its first-half profit rose 7% on strong growth at some of its luxury brands, though a steep decline in sales at its flagship Gucci fashion house exposed how weakness in Asian markets continues to hit luxury firms.
The French group said Gucci’s revenue—which accounts for 37% of the group’s total—fell 4.5% to €1.6 billion ($2.1 billion). Kering Chief Financial Officer Jean-Marc Duplaix said the decline didn’t come as a surprise, as the company expected to see an improvement only in the second half of the year. In recent years, Gucci has followed other luxury houses, including Louis Vuitton, in focusing its strategy on high-income customers who are prepared to pay several thousand dollars for select leather goods such as crocodile-skin handbags. Read more.