Gucci, owner of brands including Sergio Rossi and Boucheron, has said that revenues for this year will come in 6% below earlier forecasts at $2.45bn.

The group blamed much of the loss on an effort to revive the Yves St Laurent division, and wrestle the brand from the hands of "inappropriate" traders.

The division is expected to lose $75m this year, compared with the $50m Gucci had earlier hoped, reflecting "the need to make investment in product design, marketing and communication", Gucci chief Domenico De Sole said.

Yves St Laurent has also incurred costs in the setting up of an own-brand store network, said Mr De Sole.

But Gucci remains confident that the business is heading towards sustained profitability, and on track to become "one of the most successful brands in the luxury industry", he said.

And, overall, Gucci revenues rose 5.5% to $559.7m in the February-to-April quarter, compared with the same period last year.

Leather row

The firm credited much of the rise to an "outstanding" performance by the Gucci division itself, where sales rose 15% in all, and by almost one half in France.