Gucci sales decline amid weak demand in China

Gucci, the flagship brand of Kering, reported a 6 percent decline in third-quarter sales, reaching 1.29 billion euros. This downturn is attributed to reduced foot traffic in stores, particularly in China, as well as slowing economic activity in the United States and geopolitical tensions in the Middle East.

Kering's total group revenue fell by 1 percent. In response to the slump, the company plans to close a total of 125 retail locations by the end of the year and increase spending on marketing and customer experience to attract buyers. The company is currently executing a five-year plan led by CEO Luca de Meo to double profit margins.

The luxury sector is facing broader challenges, with competitors Hermès and LVMH also reporting weaker-than-expected performance. Analysts note that investors are increasingly pricing in the risk of prolonged demand stagnation rather than viewing luxury goods as a recession-proof safe haven.