Gucci’s Parent Company, Kering, Navigates Shifting Luxury Landscape with Store Closures and L’Oréal Alliance
Chongqing, China – October 26, 2025 – Luxury conglomerate Kering, the parent company of iconic brand Gucci, is facing headwinds in the global market, reporting a 5% sales decline in its third quarter. This breaking news comes as the company embarks on a restructuring plan, including store closures and a significant strategic partnership with L’Oréal, signaling a pivotal moment for the future of the luxury giant. This is a developing story, and we’re bringing you the latest updates as they unfold. For those following Google News trends, this is a key development in the luxury sector.
Kering’s Q3 Performance and the Road to Recovery
According to a press release issued Wednesday, October 22nd, Kering’s performance, while showing sequential improvement, still lags behind the broader market. Luca de Meo, Kering’s director, emphasized the company’s “determination to act at all levels” to address the challenges. The 5% decline follows a more substantial 15% drop in the previous quarter, highlighting the urgency of the situation. The luxury market, once seemingly impervious to economic downturns, is now feeling the pressure of changing consumer habits and geopolitical uncertainties.
A Billion-Euro Lifeline: The L’Oréal Partnership
In a move to bolster its financial position, Kering has entered into a “strategic partnership” with L’Oréal, securing a 4 billion euro injection of liquidity. This will be achieved through the sale of the Creed perfume brand and a licensing agreement. This deal isn’t just about immediate cash flow; it represents a strategic recalibration, allowing Kering to focus on its core brands and streamline operations. The perfume market, while lucrative, often operates with different dynamics than high-fashion, making Creed a logical asset to divest.
Gucci at the Forefront of Restructuring: Store Closures and Cost Cutting
The restructuring isn’t limited to financial maneuvers. Kering has already closed 55 stores globally since the beginning of 2025, with 26 of those closures impacting the Gucci brand. This is a significant move, considering Gucci contributes nearly half of Kering’s annual turnover and two-thirds of its operating profit. These closures aren’t random; they’re part of a broader effort to reduce operational costs, initiated back in January. The locations of these closures haven’t been fully disclosed, but a Gucci store at Jiangbei-Chongqing International Airport, China, is confirmed among them, indicating a strategic reassessment of key markets.
The Evolving Luxury Market: A Deeper Dive
The challenges facing Kering reflect broader trends in the luxury market. Increased competition from emerging brands, a shift towards experiential luxury (travel, events), and the growing importance of sustainability are all reshaping consumer preferences. The Chinese market, historically a key driver of luxury growth, is also experiencing a slowdown, adding to Kering’s difficulties. Understanding these dynamics is crucial for investors and industry observers alike. SEO analysis shows increasing searches for “luxury market trends” and “Gucci sales,” indicating strong public interest.
Furthermore, the rise of the pre-owned luxury market, fueled by platforms like The RealReal and Vestiaire Collective, is impacting new sales. Consumers are increasingly comfortable with buying and selling pre-owned items, offering a more accessible entry point into the world of luxury. This shift necessitates that brands like Gucci adapt their strategies to cater to this evolving demand, potentially through their own resale programs or partnerships.
The partnership with L’Oréal also highlights the growing convergence between luxury and beauty. L’Oréal’s expertise in fragrance and cosmetics can provide valuable synergies for Kering, potentially unlocking new growth opportunities. This collaboration could also lead to innovative product development and marketing strategies.
Kering’s situation serves as a potent reminder that even the most established luxury brands aren’t immune to market forces. The company’s response – a combination of cost-cutting, strategic partnerships, and a renewed focus on core brands – will be closely watched by the industry. Staying informed about these developments is vital for anyone interested in the future of luxury retail. Keep checking back with Archyde for the latest updates on this breaking news story and expert analysis on luxury market trends.
