Kering Reports Halved Profit, Warns of Decline

Kering has reported a significant 11% drop in second-quarter sales, totaling 4.5 billion euros, which exceeded analysts' expectations for a 9% decline, raising concerns about the luxury group's future. The company warned of a potential 30% decrease in operating income for the second half of the year following a 42% decline in the first half, with its flagship brand Gucci experiencing a 19% sales drop. Efforts to rejuvenate Gucci, including new minimalist designs from creative director Sabato de Sarno, are facing challenges due to a downturn in the global luxury market and weakened demand in China. CEO François-Henri Pinault acknowledged the adverse market conditions but expressed determination to return to growth. The overall luxury sector is grappling with declining demand, particularly in the Asian market, impacting Kering's other brands as well. Kering's shares have fallen significantly, reflecting the broader struggles within the luxury goods market amidst economic uncertainty.