Shares in Kering have fallen 6% after it reported a “difficult” start to the year amid ongoing struggles in the luxury market.
The French conglomerate, which owns Gucci and Yves Saint Laurent, said first quarter sales were down 14% to €3.9bn compared to the same period last year.
Kering Beauté sales bucked the trend however, rising 6% to €71m “due to the very balanced development of Creed”, including the “promising” launch of feminine fragrance Eladaria.
Wholesale revenue for its beauty business also grew 2% in the quarter.
Sales at Kering’s biggest brand, Gucci, plunged 25% on a compatible basis, while Yves Saint Laurent was down 8%.
Gucci’s newly appointed Artistic Director Demna Gvasalia is set to unveil his first new designs for the house in September.
Bottega Veneta was the only one of Kering’s core fashion brands which saw growth, with sales rising 4%.
Kering’s other fashion houses, which include Balenciaga and McQueen, were also down 11%.
Eyewear and corporate, which includes Kering Beauté, saw growth of 3%.
In its presentation to investors, Kering noted that it is “working on an upcoming Balenciaga launch” in the beauty division.
“As we had anticipated, Kering faced a difficult start to the year,” said Chairman and CEO François-Henri Pinault.
“In this environment, we are fully focused on executing on our action plans to reach our strategic and financial objectives and strengthen the positioning of our houses on all our markets.
“We are increasing our vigilance to weather the macroeconomic headwinds our industry faces, and I am convinced that we will come out stronger from the present situation.”
Kering created its beauty division in 2023 to develop the beauty arms of its Bottega Veneta, Balenciaga, Alexander McQueen, Pomellato and Qeelin houses.
It acquired luxury fragrance house Creed in June that year for a reported US$3.8bn, according to the Financial Times.
Kering Beauté named Nathalie Berger-Duquene the new CEO of Creed and the perfume brand reopened its London, UK, flagship store after a lavish refurbishment this month.
In October 2024, the division launched its first fragrance collection for Bottega Veneta, comprising five fragrances from the Venetian fashion house’s Creative Director Matthieu Blazy.