Shares in Gucci owner Kering leap as investors cheer 'signs of rebound'
Shares in Gucci owner Kering have soared as investors cheer signs of recovery at the troubled luxury group.
While revenue at the company, which also owns Bottega Veneta and Balenciaga, fell 3 per cent in the last three months of the year, it marked an improvement on the previous quarter.
Kering’s new chief executive Luca de Meo hailed signs that the group was ‘rebounding from its lowest point'. He has been battling to revive Kering's fortunes after being one of the luxury groups hardest hit by an industry downturn.
Shares soared by as much as 16 per cent in early trading on the Paris stock market as investors hailed an improvement. Sales had dropped 5 per cent in the previous quarter.
Its largest brand Gucci saw sales drop 10 per cent to £1.4billion - but this was better than the 12 per cent that had been forecast by analysts.
Stars including Taylor Swift have worn Gucci designs - but the brand has struggled with falling sales
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De Meo admitted that Kering’s 2025 performance ‘does not reflect the group’s true potential’ after operating income fell 33 per cent to £1.39bn and sales dropped 10 per cent to £12.8bn.
De Meo, who ran carmaker Renault before joining Kering in September, said: ‘In the second half, we took decisive actions — strengthening the balance sheet, tightening costs and making strategic choices that lay the foundations for our next chapter.’
And he pledged to do more to cut costs to create ‘a leaner, faster Kering, enhancing brand positioning and sales, rebuilding margins and strengthening cash generation' in 2026.
He said: ‘We are already seeing some signs that Gucci is rebounding from its lowest point.’
Third Bridge analyst Yanmei Tang said Gucci was ‘caught in a “stuck in the middle” dilemma’ that was hitting spending among the key market of Chinese consumers.
‘High-net-worth consumers are gravitating toward Hermès and LVMH, while middle-income consumers are increasingly turning to emerging domestic Chinese brands,’ Tang said.
De Meo has been cutting costs and the company last year sold its beauty arm to L’Oreal for £3.5billion, including its fragrance line Creed where bottles of perfume can cost as much as £350.
There have been signs that shoppers are regaining their appetite for high-end goods after more optimistic updates from the likes of LVMH and Burberry this year.
Birkin bag maker Hermes - which has bucked the sentiment of gloom compared to its rivals - will also give investors an update on Thursday this week.
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