French luxury fashion group Kering has anticipated a decline of up to 45 per cent in operating income for the first half of this year after reporting a 10 per cent drop in revenue in the first quarter.

The company logged €4.5 billion (US$4.8 billion) in sales for the three months. 

“Kering’s performance worsened considerably in the first quarter,” said François-Henri Pinault, chairman and CEO of Kering Group. “While we had anticipated a challenging start to the year, sluggish market conditions, notably in China, and the strategic repositioning of certain of our Houses, starting with Gucci, exacerbated downward pressures on our topline.”

Gucci – which accounts for more than half of its turnover – generated €2.1 billion (US$2.2 billion) for the first quarter, down 18 per cent on a comparable basis. The group flagged Gucci’s steep sales slip last month due to the brand’s poor performance in Asia Pacific. 

The company said the first collections by creative director Sabato de Sarno, which have gradually become available in stores since mid-February, had been “very well received”. 

Meanwhile, Yves Saint Laurent and Bottega Veneta’s sales dropped 6 per cent and 2 per cent respectively. Sales of the group’s other houses were down 6 per cent. 

“In view of this revenue decline, together with our firm determination to continue investing selectively in the long-term appeal and distinctiveness of our brands, we now expect to deliver sharply lower operating profit in the first half of this year,” said Pinault.

Shares of the French luxury group fell more than 9 per cent at opening on Wednesday.