Mixed results from luxury fashion giant Kering, which owns Yves Saint Laurent, Gucci and Balenciaga, provided a boost for the wider high-fashion fashion sector on Wednesday.
The French luxury group reported a “très solide” performance for last year but gave a gallic shrug over a fourth quarter that was “contrasté” – or “mixed” in the English translation.
Revenue from Gucci fell more than expected in the forth quarter, down 14% while analysts had forecast an 11% drop.
Finance chief Jean-Marc Duplaix said the performance from Gucci "did not meet our expectations" but the group was confident it could turn around the brand in 2023.
He said trading in China in 2023 had been "very encouraging" after travel restrictions were lifted, which sparking industry hopes for a sharp rebound in sales.
Analyst Zainab Atiyyah at Third Bridge said: “Kering will be looking East and hoping Chinese revenge travel and spending after COVID drives their growth in 2023.
“Our experts expect Europe and China to be good markets for Kering as Chinese tourists opt to visit France and Italy, thanks to the weak euro.”
Atiyyah noted that YSL enjoyed sales growth across all regions in 2022, which is “likely to continue, thanks to a strategic decision to focus on local clients and heritage”.
But Gucci has a “very different” strategy to embrace big trends.
Gucci last month poached relative unknown Sabato De Sarno from Valentino to be its new creative director, with his debut collection to be shown in September.
Atiyyah said De Sarno “will be able to give a much more refined aesthetic to Gucci and deliver more steady growth. He’s very strong on menswear, which is one of the areas Gucci needs to develop.”
Kering shares fell 4% in early trade in Paris but they were up 5% by late morning, while Burberry Group PLC (LSE:BRBY) was up 3%, Richemont 2.5%, LVMH rose 1.7% and Hermes 2.2%.