Kering Faces Challenges as Gucci Sales Decline, Pursues Strategic Restructuring
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Kering, the luxury group behind brands like Gucci and Creed, is navigating a period of declining sales and implementing meaningful restructuring measures, including store closures and a new partnership with L’Oréal. The company’s recent performance has lagged behind the broader market, prompting a renewed focus on cost reduction and strategic realignment under its new leadership.
Kering’s general director recently stated that the group’s third-quarter performance, while showing sequential advancement, “remains below that of the market.” this assessment followed the release of figures indicating a 5% decline in activity from July to September,building on a more substantial 15% drop in the preceding quarter.
Strategic Partnership with L’Oréal Injects Liquidity
To bolster its financial position, Kering recently finalized a “strategic partnership” with L’Oréal. This collaboration is expected to generate 4 billion euros in liquidity for Kering through the sale of the Creed perfume brand and a licensing agreement specifically involving Gucci. The move signals a willingness to streamline operations and focus on core brands.
The Italian leader, who assumed office on September 15, emphasized a “determination to act at all levels of the company” in a press release issued on Wednesday, October 22. This commitment extends beyond financial maneuvers and into a thorough overhaul of the company’s operational structure.
Store Closures Signal Cost-Cutting Measures
A key component of Kering’s restructuring plan involves significant cost reductions. Initiated in January, these efforts have already resulted in the closure of 55 stores globally since the beginning of 2025. A substantial portion of these closures – 26 in total – are impacting the Gucci brand, which currently accounts for nearly half of Kering’s annual turnover and two-thirds of its operating profit.
These closures represent a deliberate attempt to optimize the company’s retail footprint and improve efficiency. While the specific locations of the closed stores have not been disclosed, the scale of the closures underscores the seriousness of the challenges facing the luxury conglomerate.
The company’s future strategy will likely hinge on its ability to navigate these headwinds and capitalize on the opportunities presented by its partnership with L’Oréal. The remaining 73.93% of a more detailed analysis remains available to subscribers.
Here’s a breakdown answering the “Why, Who, What, and How” questions, integrated into a more substantive news report format:
why: Kering is facing declining sales, lagging behind the broader luxury market. This downturn is primarily driven by weaker performance from its key brand,Gucci. the company aims to address these challenges through cost reduction, operational streamlining, and strategic financial maneuvers.
Who: Kering,a French luxury group,is the central entity.Key figures include the company’s general director and the “Italian leader” who assumed office on September 15th. Gucci is the brand most considerably impacted by the changes. L’Oréal is a key partner in the restructuring.
What: Kering is undergoing a significant restructuring plan. This includes the sale of the Creed perfume brand to L’Oréal for 4 billion euros, a licensing agreement with L’Oréal for Gucci, and the closure of 55 stores globally (2
