Navigating Tariff Turbulence

Kering is currently assessing how to manage the increase in customs duties upon entering the United States.This situation contrasts with competitors like Hermès, which intends to fully pass the tariff inflation onto its selling prices, and Louis Vuitton, which has already increased online prices for its bags.

Armelle Poulou, kering’s financial director, addressed the strategy during the publication of the company’s first-quarter turnover on Wednesday, April 23, stating that Kering aims to Protect its margins through price increases.

Sales Slump and Future Outlook

• First Quarter 2025: Sales dropped by 14%, amounting to 3.88 billion euros.
• Fourth Quarter 2024: A preceding decrease of 12% was recorded.
• Second Quarter 2025 Forecast: Expectation of a similar Two-digit decrease,according to Poulou.

These figures cast doubt on the management’s earlier prediction of Stabilization in 2025, which was mentioned on February 11,following a 62% decrease in net profit.

Expert Analysis

Industry analysts suggest that Kering’s approach reflects a broader trend among luxury brands to maintain exclusivity and perceived value, even during economic downturns. By increasing prices, Kering signals confidence in its brand and caters to a consumer base less sensitive to price fluctuations.

FAQ: Kering’s strategy Amidst Economic Headwinds

Why is Kering increasing prices?

To protect profit margins in response to rising customs duties and declining sales.

How does this compare to other luxury brands?

Hermès will fully pass tariff costs to consumers,while louis Vuitton has already raised online prices.

What were Kering’s sales figures for Q1 2025?

Sales dropped by 14% to 3.88 billion euros.

What is the outlook for Q2 2025?

Another Two-digit decrease is expected.