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Gucci sales report slower than expected growth

Gucci is planning to undertake more marketing campaigns, including in the United States, in the second half of the year. Sales rose more slowly than expected in the second quarter, taking the shine off a jump in profit margins at the Italian fashion label which contributes the bulk of revenue and profit at luxury group Kering.

The brand is at a disadvantage due to a high comparison base but the slowdown, while expected, comes just as sales growth at rivals including LVMH's Louis Vuitton and Christian Dior brands leapt ahead of forecasts in the period. Gucci's comparable sales expanded 12.7 per cent from April to June, missing expectations for 14 to 15 per cent growth. A weak performance in the United States, linked partly to a drop in Chinese visitors there, dragged on Gucci's sales and that of other Kering labels, which include Saint Laurent, the group's Financial Director Jean-Marc Duplaix said.

The label is still converting stores to its rococco new look, which has helped boost sales by the square metre in the shops it has already redesigned, and shaken up its product and price mix in recent years. This has helped drive up margins and operating profits at Gucci proved a bright spot in the second quarter, reaching 40.6 per cent at the end of June and already exceeding medium-term goals set out a year ago.

 
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