Kering shares fall sharply
LVMH and Hermes shares also fall
Kering warns of weak performance for Gucci in Asia

PARIS, March 20 Reuters Kering39;s shares slumped on Wednesday after the French luxury goods company warned that first quarter sales at its star label Gucci would drop by around 20 due to weakness in Asia.

Kering shares were down by around 13 percent in early session trading, dragging down the stock prices of other leading luxury goods companies such as LVMH and Hermes.

The warning underscores the challenge Kering faces as it seeks to reignite sales momentum at Gucci, which accounts for half of group sales and twothirds of profit, while navigating economic headwinds in key markets especially China.

The label is undergoing a design overhaul under the creative direction of Sabato de Sarno as it seeks to regain ground lost to rivals like LVMH39;s Louis Vuitton and Dior in recent years.

The group39;s forecast sales decline of around 10 for the first three months of the year is significantly worse than consensus expectations for 3 drop.

The trading update, which comes as Gucci39;s new designs trickle into stores, is a sign that the more classic, legacy products such as leather handbags the label has emphasized as it moves upmarket, are not resonating with consumers, said James Grzinic, an analyst with Jefferies.

An encouraging reception for the new designs is dwarfed by that tough headwind, said Grzinic.

De Sarno39;s sleek, paredback and sensual styles…