Gucci parent Kering closes half of China stores, takes sales hit from coronavirus
Zhang Peng | LightRocket | Getty Images
Gucci owner Kering SA has closed half of its stores in mainland China and the locations that are still open are operating on reduced hours, CEO Francois-Henri Pinault as the company warned investors of a drop in sales.
“We have a strong drop in traffic and in sales over the last 10 days,” CEO Francois-Henri Pinault told analysts on a conference call Wednesday discussing its fourth-quarter earnings.
Prior to the outbreak, the luxury-goods maker, which also owns Balenciaga and other high-end brands, had a strong performance for January in part driven by Chinese customers. Sales for the fourth quarter increased 11% to 4.36 billion euros ($4.77 billion).
“In the past few weeks, as the very positive start of the year, our environment has changed significantly with the coronavirus outbreak,” Deputy CEO Jean-Francois Palus said. “Due to the evolving nature of the situation, it is impossible at this time to fully evaluate its impact on our businesses and how fast [China] will recover. We are hearing lots of different theories on the speed and shape of the rebound, but the reality is that it is too early to predict.”
The company did not give a specific estimate of the sales hit caused by the virus.