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French luxury conglomerate Kering announced on Tuesday a significant 46% drop in net profit for the first half of the year, totalling €474 million ($547 million), down from €878 million in the same period last year.
Overall sales also fell by 16 per cent to €7.6 billion, primarily driven by continued struggles at its flagship Gucci brand. The group is now looking for a new CEO to help reverse its fortunes.
Kering recently appointed Luca de Meo, formerly the head of French automaker Renault, as its new chief executive, who will work alongside current board chairman Francois-Henri Pinault to revitalise the company.
Pinault stated, “Though the numbers we are reporting remain well below our potential, we are certain that our comprehensive efforts of the past two years have set healthy foundations for the next stages in Kering’s development.”
Despite its significant contribution—accounting for 44 per cent of Kering’s sales and roughly two-thirds of its operating profit—Gucci has faced challenges in its turnaround efforts.
The Italian fashion house, renowned for its handbags, saw its sales drop by 26 per cent to €3.03 billion in the first half, with operating profit down 52 per cent to €486 million.
In March, Kering brought in Georgian designer Demna as Gucci’s new artistic director to try and reignite the brand.
