Leather handbag sales defy gloomy 2nd quarter Gucci results
For the three months ended July 31, net income was down to Eur42.2 million ($42 million) from Eur95.4 million the year before. In an interview, chief executive officer Domenico De Sole said that notwithstanding a war with Iraq, the company was still on target for year-end earnings of Eur2.60 per share. Sales of leather goods and shoes for the brand known for its double-G logo were both down 16 percent, while watch sales slumped 20.5 percent.
Gucci is not alone among the world’s biggest luxury goods brands to register a big drop in sales this year. Earlier this month, Prada reported a 49% fall in first half profits while the luxury market leader LVMH (Moet Hennessy Louis Vuitton has lost 18% of the value of its stock. Gucci stock is 11% down this year and while that of Bulgari has fallen 58%.
The one bright spot leather goods sales by the Parisian fashion label, Yves Saint Laurent, which Gucci acquired in 1999. These soared 207%, largely on the strength of demand for the leather and horn Mombasa handbag, introduced in December 2001.
