US slowdown depresses Gucci shares
Shares in Italian luxury goods group Gucci plummeted last week after the company issued a profits warning citing the continuing slowdown in the US economy and the cost of restructuring its French fashion house Yves Saint Laurent.
The company’s shares nose-dived 11 per cent at one point before recovering slightly. The warning also dented the confidence of the company’s main shareholders, as shares in LVMH, (Möet Hennessy Louis Vuitton) which owns 21 per cent of Gucci, and Pinault Printemps Redoute, which holds 42 per cent, both dropped by almost 1.5 per cent before recovering.
The two luxury goods rivals have been engaged in a high profile round of legal battles for control of Gucci. (See leatherbiz.com story ‘PPR Scotches rumours of Gucci buyout’ 25.06.01). Gucci said losses at Yves Saint Laurent were expected to rise to $75 million –far above initial forecasts of around $50 million.
The warning came as Gucci Group reported a 20 per cent increase in net profit for the first quarter to $55.9 million, as opposed to $46.6 million for Q1 2000, buoyed by strong sales in leather goods. The company said its full-year 2001 revenues would now come in at $2.45 billion compared with its previous forecast of $2.6 billion.
