Gucci owner halts sales decline as luxury category shows signs of stabilisation
Kering posted better than expected results as it begins its turnaround under new CEO Luca de Meo.
Gucci-owner Kering reported a better than expected sales decline in its first set of results since it appointed a new CEO to lead its turnaround mission.
The business – which owns luxury brands such as Gucci, Saint Laurent and Balenciaga – posted promising third quarter results on Tuesday (22 Oct) signalling easing pressure after a challenging period for luxury businesses.
Group revenue fell 5% to €3.4bn (£2.95bn) on a like-for-like basis and 10% reported, including a five-point currency drag. The result is a marked upturn after a 15% drop in Q2, reflecting steadier store traffic and early momentum from new product lines.
CEO Luca de Meo said in a statement accompanying the results that while its performance indicates a “clear sequential improvement” he accepts it is still performing “far below” the market.
“This reinforces my determination to work on all dimensions of the business to
return our Houses and the Group to the prominence they deserve,” he said.
Across the group, retail sales — three-quarters of its total revenue — were down 6% like-for-like, a notable improvement from the previous quarter. North America saw positive results, up 3% year-on-year after a 10% fall in Q2, while Japan and Asia Pacific remained weaker but improved sequentially.
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Chief financial officer Armelle Poulou claimed on an investor call that the quarter ended on “a series of bangs” as Gucci, Saint Laurent, Bottega Veneta and Balenciaga each unveiled new collections that drew strong critical and digital engagement.
Gucci’s La Famiglia presentation, for example, a short film and capsule edited by creative director Demna, generated record online reach and positive reactions across social platforms.
“Of course, this will not change the revenue profile in Q4,” Poulou said, “but it is restoring traffic and re-engagement among top clients.”
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Chief operating officer Jean‑Marc Duplaix said the results show “encouraging progress” as the company accelerates efforts to reignite the top line and simplify operations.
“We have not been sitting on our hands,” he said. “Luca’s arrival has re-energised the organisation. Our number one priority is to reignite growth.”
As part of its efforts to simplify its operations, Kering continues to shrink its store network to focus on productivity and density.
Its portfolio stood at 1,758 stores at the end of September, down 55 stores since year-end, half of them at Gucci. Poulou said Kering recoups 30 to 80 per cent of sales when closing overlapping locations, as staff and clients are moved to nearby stores.
The quarter also saw Kering announce a landmark €4bn (£3.48bn) deal with L’Oréal to sell its Kering Beauté division — including Creed Fragrances — and grant beauty licences for Bottega Veneta and Balenciaga, with an option for Gucci once its current Coty agreement expires.
The two groups will also form a joint venture in luxury wellness and longevity, combining L’Oréal’s scientific research with Kering’s client network and real estate expertise.
Duplaix described the partnership as a “win-win” deal that secures the brands’ long-term development while significantly reducing Kering’s debt load. The cash inflow is expected in the first half of 2026.
Kering remains cautious for Q4 given tougher comparisons and uneven consumer confidence, but both executives believe the quarter marked an inflection point.
“Numbers are one thing,” Duplaix said. “What matters is that our actions are starting to show.”
