French fashion company Kering gave a cautious assessment of rebounding luxury sales in China following a “deep impact” on its flagship brand Gucci in the first quarter, reported Caixin.
Sales in the Chinese mainland turned positive in April for Kering, whose other brands include Saint Laurent and Balenciaga, Chief Financial Officer Jean-Marc Duplaix told reporters Tuesday, citing the repatriation of tourist spending as well as pent-up demand following the coronavirus lockdown as factors supporting the recovery.
“We have to be very cautious as we only have a few weeks to analyze since stores were able to reopen,” Duplaix said. The trend of catching up on purchases thwarted by quarantine measures is likely to be short-term, he said.
The shares fell as much as 6.9% early Wednesday in Paris, and they’re down 21% so far this year. First-quarter sales fell 16% globally, compared with previous guidance for a drop of around 15%, Kering said in a statement. Gucci’s sales declined 23%. With stores still shuttered in most of the world, it’s “extremely difficult” to make predictions about when business will improve, Duplaix said. The company said it doesn’t expect sales to recover in the US or Europe before June or July.