Luxury group Kering suffered a sales slowdown during the key Christmas shopping season as Covid-19 lockdowns closed shops across Europe, which hurt demand for fashion and accessories at its biggest brand Gucci.

Quarterly revenue at the group controlled by French billionaire François-Henri Pinault dropped 4.8 per cent on a comparable basis to €4bn, while sales at Gucci contracted 10.3 per cent to €2.3bn. Analysts had expected a 1 per cent increase for the group during the final three months of the year, and a 4 per cent drop for Gucci.

Kering shares opened 7 per cent lower in morning trading in Paris.

The luxury industry has been hit hard by the freeze in international travel that has kept big-spending Chinese tourists away from the fashion capitals of Paris and Milan. But some of the pain has been offset by wealthy customers treating themselves to luxury goods while many types of other spending remain off limits during the pandemic.

To cope with the downturn, Kering and French rivals LVMH and Hermès have sought to cater more to local clientele, while cutting costs, holding digital fashion shows, and significantly expanding online sales.

Kering, whose portfolio of brands also includes Saint Laurent and Balenciaga, enjoyed a big boost to ecommerce last year, which more than tripled compared with 2019 and now accounts for 13 per cent of sales.

Kering’s shares have lagged as investors worry about whether Gucci is losing momentum after years of stellar growth driven in large part by Chinese and younger buyers, who flocked to creative director Alessandro Michele’s colourful vintage-inspired styles. They have fallen about 2 per cent in the past year, compared with a 29 per cent rise for LVMH, which is home to star brands Louis Vuitton and Dior, and a 32 per cent jump for Hermès.

Gucci, which generates most of Kering’s revenues and profits, has struggled more during the Covid-19 crisis than some rivals including LVMH’s top brands, which enjoyed a return to growth at the end of last year.

Gucci’s sales were “disappointing relative to a number of soft luxury peers, such as Vuitton, Dior, Hermès and Kering’s own brands Bottega Veneta or Balenciaga, and should continue to fuel concerns on the brand’s ability to win once again,” said Thomas Chauvet, an analyst at Citi. “On a positive note, Gucci’s profitability was a touch better than expected.”

Kering did not provide financial targets for this year, but said it would propose a stable dividend of €8 per share. Annual sales fell 16.4 per cent on a comparable basis to €15.9bn, while recurring net profit fell 39 per cent to €1.97bn.

“We are emerging from the crisis stronger and better positioned to leverage the rebound,” chairman and chief executive Pinault said in a statement. “We invest in all our brands to maximise their potential, and to resume our profitable growth journey.”