By Astrid Wendlandt
PARIS (Reuters) - Sales growth at Italian luxury brand Gucci almost ground to a halt in the fourth quarter and its parent company Kering
Gucci's performance is likely to reinforce concerns among investors about the long-term growth prospects of mega-brands such as Gucci and Louis Vuitton as consumers increasingly favour newer, niche labels.
Gucci, Kering's flagship label that accounts for more than half of its market value, saw its like-for-like sales growth in the three months to December 31 fall to 0.2 percent from 0.6 percent in the previous quarter. Analysts had expected an improvement.
Kering Finance Director Jean-Marc Duplaix said Gucci suffered from a smaller flow of tourists into Europe in the fourth quarter, while efforts to reposition the brand further upmarket were taking time.
Shares in Kering were down 2.8 percent at 150.65 euros by 0818 GMT on Friday, the biggest faller on the French blue-chip CAC 40 index <.FCHI>, which was up 0.2 percent.
Reacting to consumer fatigue with logo-heavy products, Gucci has sought to strengthen its higher-end offering with more logo-discreet leather bags and fewer canvas bags.
Duplaix said the brand's trading in China improved in the last quarter and its operating profit margin rose slightly in the second half to 31.9 percent from 31.7 percent a year earlier.
SLIMANE REVIVES YVES SAINT LAURENT
Kering, which also owns Yves Saint Laurent and Bottega Veneta, reported sharply lower full-year profits on Friday, hit by restructuring charges.
Under the stewardship of designer Hedi Slimane, appointed in 2012, Yves Saint Laurent has become the French company's fastest growing major brand, with like-for-like revenue up 42 percent in the fourth quarter alone and 22 percent in 2013 overall.
The growth was not so much driven by shop openings - as can often be the case - as half of Yves Saint Laurent's sales came from wholesale revenue, up 43 percent last year.
"Gucci's growth is a little disappointing," said Erwan Rambourg, luxury goods analyst at HSBC. "But Yves Saint Laurent's performance in the fourth quarter is very impressive."
Kering's profits were hit last year by the restructuring of mail order business La Redoute, which the group sold in a management buy-out, completing its exit from retail to focus on luxury and sports brands.
Kering's net profit for 2013 tumbled to 50 million euros ($68.6 million) from 1.048 billion a year earlier.
Recurring operating income fell 2.3 percent to 1.75 billion euros, roughly in line with market expectations.
Chief Executive Francois-Henri Pinault said he was confident the company would increase revenue and recurring operating income this year, with a focus on achieving profitable organic growth at its luxury brands and a relaunch plan for its Puma
Puma, 84 percent owned by Kering, said on Thursday it was banking on high-profile signings to underline its sporting credentials and stop sales falling this year after revenue tumbled more than expected in the last three months of 2013.
Kering added that it would recommend a dividend of 3.75 euros a share on 2013 profits, unchanged from last year.
($1 = 0.7293 euros)
(Editing by James Regan and Tom Pfeiffer)