What's Happening?
Kering, the luxury group owning brands like Gucci, Bottega Veneta, and Saint Laurent, announced a 10% revenue decline for the third quarter, marking the first financial report under new CEO Luca de Meo.
The decline, bringing revenue to 3.4 billion euros, is attributed to challenges faced by Gucci, which saw an 18% drop in sales. The group recently sold its beauty division to L’Oréal for four billion euros, aiming to reduce debt and focus on core fashion brands.
Why It's Important?
Kering's revenue decline highlights the ongoing challenges in the luxury fashion sector, particularly for Gucci, which is a significant contributor to the group's financial performance. The sale of the beauty division to L’Oréal is a strategic move to alleviate debt and refocus efforts on fashion, potentially revitalizing Gucci and other brands. This development is crucial for investors and industry analysts, as it reflects the shifting dynamics in luxury retail and the importance of strategic partnerships in enhancing brand value.
What's Next?
Kering plans to leverage its partnership with L’Oréal to boost the development of Gucci-branded perfume and beauty products, aiming for a stronger market presence. The group will focus on accelerating brand development and improving operational efficiency under Luca de Meo's leadership. The deal with L’Oréal is expected to close in the first half of 2026, providing Kering with additional resources to invest in its fashion brands and potentially improve Gucci's performance.
