The operating profit of Italian fashion brand Valentino fell by 22 per cent last year, the company announced on Friday, as the luxury industry experienced a decline in worldwide demand for premium products, especially in Asia, per Reuters. European luxury brands have relied on affluent Americans to spur growth as the prospects for China continued to look grim. However, following President Donald Trump's tariff policy, the sector prepares for what may be its longest downturn in years.
Valentino noted that one-time expenses contributed to a decrease in its operating profit to 246 million euros ($280 million) in 2024, as it persisted in investing in stores it manages directly. The Rome-based company reported a 2 per cent decline in revenue at constant exchange rates, amounting to 1.31 billion euros, even with strong sales in Japan, the Middle East, and the Americas. It reported that online sales increased by 5 per cent from the prior year, aligning with the company's goal to enhance its e-commerce sector.
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"With the appointment of Alessandro Michele as our new Creative Director, our efforts have made a significant advancement," Chief Executive Jacopo Venturini stated. Valentino brought on the ex-Gucci designer in March of last year after creative director Pierpaolo Piccioli departed, a role he held for 25 years. In 2023, Kering (PRTP.PA), the owner of Gucci, acquired a 30 per cent stake in Valentino, along with an option to purchase the entire company's share capital by 2028.
($1 = 0.8796 euros)
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