By Matthew Dalton 

PARIS -- Gucci fell further behind its big competitors in the fourth quarter, as the Italian fashion house stumbled without tourist shoppers filling its boutiques during the pandemic.

Revenue at Gucci for the quarter was 2.3 billion euros, equivalent to $2.8 billion and down 14% from a year earlier, parent company Kering SA said Wednesday. For the entire year, revenue fell 23% to EUR7.4 billion.

The results mark a sharp turnaround for Gucci after years of outperformance under Creative Director Alessandro Michele. In the fourth quarter, Gucci lagged well behind the leading fashion brands of LVMH Louis Vuitton Moet Hennessy SE: Louis Vuitton and Dior.

Those two brands reported surging revenue in the second half of last year after the industry was allowed to reopen its boutiques following lockdowns across the world in the first half of 2020. Revenue at LVMH's fashion and leather-goods division -- which is mostly Louis Vuitton and Dior -- rose 14% for the quarter.

The drop during the pandemic has exposed Gucci's heavy reliance on tourist shoppers, particularly for stores in Europe that have depended on Chinese clientele coming to the region. The brand is in the midst of tweaking its image to burnish its appeal among clientele older than 40, an effort partly directed at Europeans.

Mr. Michele has lately toned down the baroque flourishes of his earlier collections and removed sports logos that helped his designs generate buzz on social media. More recently, Gucci has released new handbag lines that emphasize the brand's historical ties to Jackie O and Princess Diana.

Gucci is also investing in more-expensive product lines that appeal to wealthier individuals, such as jewelry and high-end watches.

"Precious skins of course will be developed significantly, particularly at Gucci," said Francois-Henri Pinault, Kering's chief executive and controlling shareholder.

Mr. Pinault said that a number of one-off factors hurt Gucci's quarterly results. The brand pushed back the unveiling of its cruise collection to late in the fourth quarter, as part of a new schedule. That meant a dearth of new products for much of the quarter.

Gucci is also removing its products from wholesale stores in favor of directly operated boutiques, dragging on sales.

"It's irrelevant to use Q4 to draw long term conclusions on Gucci," Mr. Pinault said. "That would be so wrong."

Write to Matthew Dalton at Matthew.Dalton@wsj.com

 

(END) Dow Jones Newswires

February 17, 2021 06:10 ET (11:10 GMT)

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