Valentino’s Operating Profit Declines Amid Luxury Sector Slowdown

The Italian fashion house Valentino reported a 22% decrease in operating profit for the past year, the company announced on Friday. This decline reflects a broader slowdown in the global demand for luxury goods, particularly in Asian markets.

With a somber outlook for China, European luxury conglomerates have been depending on affluent consumers in the United States to stimulate growth. However, the sector is now preparing for a potentially extended downturn, influenced by tariff policies.

Valentino indicated that one-time expenses also contributed to the reduction in operating profit, which fell to 246 million euros ($280 million) in 2024. These costs are associated with ongoing investments in directly operated retail locations.

Despite strong sales performances in Japan, the Middle East, and the Americas, revenue experienced a 2% decrease at constant exchange rates, totaling 1.31 billion euros, according to the Rome-based firm.

The company noted a 5% increase in online sales compared to the prior year, aligning with Valentino’s strategic objective to enhance its e-commerce operations.

Chief Executive Officer Jacopo Venturini stated, “Our work has reached a pivotal phase with the appointment of Alessandro Michele as our new Creative Director.”

Valentino recruited the former Gucci designer in March of the previous year, succeeding Pierpaolo Piccioli, who held the creative director position for a quarter-century.

In 2023, Kering, the owner of Gucci, acquired a 30% stake in Valentino, which includes an option to purchase the remaining share capital of the company by 2028.