Kering, the French luxury conglomerate that owns Gucci, announced a challenging 2025. Sales fell 13% to €14.67 billion and net profit plunged to just €72 million, a drop of more than ten‑fold from the previous year. The numbers are still weighed down by Gucci’s continued weakness.
CEO Luca de Meo, who took the helm in September, stressed that the 2025 performance does not reflect the group's true potential. He promised a clear roadmap at the upcoming Capital Markets Day, focusing on brand‑specific strategies, a leaner organization, and stricter financial discipline.
Gucci’s Struggle and Early Signs of Recovery
Gucci, which accounts for 41% of Kering’s annual sales and over 60% of its operating profit, saw revenues tumble 22% to €6 billion. However, the brand showed a modest rebound in the third quarter, driven mainly by strong handbag sales. This slight uptick helped lift Kering’s share price by more than 12% during the afternoon trading session in Paris.
Strategic Moves Under de Meo
De Meo has already reshuffled the leadership team, appointing Francesca Bellettini as Gucci’s deputy CEO and bringing in designer Demna from Balenciaga to revitalize the creative direction. He also announced a “portfolio strategy” that will align the group’s brands—Gucci, Yves Saint Laurent, Bottega Veneta, Balenciaga, among others—under a more coordinated framework.
According to the CEO, “the level of nonsense has dropped dramatically; we’re speaking plainly and attacking issues head‑on.” He added that teamwork across brands is essential for a sustainable comeback.
Store Rationalisation
Kering plans to close roughly 150 stores this year, with a third of those closures affecting Gucci locations. The focus will be on trimming under‑performing sites in Asia and the United States while preserving profitable flagship stores.
Future Growth Engines
To reduce dependence on Gucci, Kering will lean more heavily on Yves Saint Laurent, especially in the Chinese market. Meanwhile, the smaller brand Alexander McQueen is undergoing a strategic review, with potential staff reductions in its London and Italian offices as the group seeks to cut losses and refocus its positioning.
De Meo concluded, “I’m not running a charity; I’m managing a business.” His pragmatic approach signals a determined effort to steer Kering back to profitability and reclaim its standing in the luxury sector.