A sharp decline in profits for the first half of 2024 and a downward revision of the guidance for the rest of the year, announced the Keringits parent company Gucci and other luxury brands.

In particular, the shares of the giant company plunged up to 9% as the markets opened, to a 7-year low.

It is noted that the luxury group announced late on Wednesday that its revenue fell by 11% in the first half of 2024, compared to the same period last year. The decline was “against the market slowdown in most regions except Japan,” the company said in a statement.

“There was a noticeable slowdown in China, while trends did not improve significantly in North America and Europe,” Kering added.

Group revenue in Japan jumped 22% in the first half of the year, while performance in Asia fell 20%.

The luxury company also said it expects recurring operating profit to fall as much as 30% year-on-year in the second half of 2024, citing “uncertainties weighing on the evolution of demand from luxury consumers.”

Recurring operating profit fell 42% in the first half of the year, the company noted, adding that this was in line with guidance issued when the group reported its first-quarter figures earlier this year.

It is recalled that the LVMH group announced on Wednesday night that its sales in the Asian market, which includes China but not Japan, fell 14% in the April-June quarter, worsening from a 6% drop in the first quarter of the year.

According to the BBC, the Paris-based French group is not alone. The same situation is experienced by many of its competitors who are also seeing their sales decline in the world’s second largest economy.

In the same… cauldron Burberry, Swatch, Richmont, Hugo Boss

In addition to the LVMH group, a similar picture was presented by the British brand Burberry according to which its sales in China fell by more than 20% compared to the previous year.

And the group Swatches -which controls the brands Blancpain, Longines and Omega – pointed out that weak demand from China pushed sales 14.4% lower in the first half of 2024.

Richemont, which owns the Cartier brand, saw its sales in China, Hong Kong and Macau drop 27% in the quarter ended June 30.

At the same time German fashion giant Hugo Boss downgraded its sales estimates for the year due to concerns about weak demand from markets such as China and the UK.

Recent data from China shows its economy is still struggling to recover from the recession created by the pandemic, as retail sales figures for both June and the second quarter of the year came in below estimates.