Kering in the first half of 2025: a warning sign for French luxury
Kering Group reported a sharp decline in the first half of 2025, with revenue of €7.59 billion, down 16 percent as reported and 15 percent on a comparable basis. Second-quarter revenue reached €3.7 billion, a decrease of 18 percent, confirming weak demand and competitive pressure in several key markets. Recurring operating income fell to €969 million.
The causes of underperformance
Several factors are at play: a slowdown in luxury demand within a more selective macroeconomic context, intensified competition from brands experiencing very strong growth, and a normalization of average spending, particularly in Asia Pacific . This region is experiencing the sharpest contraction, penalizing the group's flagship brands.
Brand by brand: shock at Gucci , resilience at Bottega Veneta
The heavyweight Gucci is dragging down the overall performance. Its sales plummeted by 26 percent in the first half of the year, highlighting an ongoing phase of commercial and stylistic redefinition. Saint Laurent is also declining, while Bottega Veneta is bucking the trend, with a slight increase in revenue and improved margins. The peripheral businesses are providing a positive counterpoint. Kering Eyewear saw a 2 percent increase on a like-for-like basis and Kering Beauty a 9 percent rise, driven in particular by Creed.
Market reactions and agency perspectives
Kering 's credit rating outlook from stable to negative, pointing to weakness in Asia Pacific , reliance on Gucci , and risks to the execution of the turnaround. The long-term rating, however, remains investment grade.
External headwinds, currencies and tariffs
Beyond demand, external factors are weighing on business activity, including unfavorable currency effects and pricing sensitivity to changes in US tariffs. The finance department has indicated it is considering targeted price increases in the United States to offset potential additional tariffs. These adjustments remain challenging in a more subdued consumer environment.
Governance and strategic direction
The semester is also marked by a change in governance. Luca de Meo will take over as CEO in mid-September 2025, with a mandate to accelerate execution and restore the company's path to growth . Scope, organization, resource allocation, and collection timelines will be key considerations.
Short-term recovery levers
-
Gucci
's product range is being revamped, with priority given to clarifying core collections, refocusing color palettes, and implementing a more market-driven pace of new releases. The goal is to regain desirability without diluting the brand's DNA, by leveraging retail execution and clienteling strategies. -
Retail excellence and customer experience
: Emphasis on omnichannel , mobile checkout, stylist appointments, and real-time size availability. A seamless and highly personalized journey improves conversion and repeat purchase rates. -
Discipline of allocation:
Measured reduction of wholesale networks, optimization of the store network, assortments calibrated city by city, and protection of value through a controlled price and volume policy. -
Diversification of engines
Capitalizing on Bottega Veneta , Kering Eyewear and Kering Beauty to smooth out cycles, while maintaining the ambition to relaunch Saint Laurent in its core categories.
Why does sustainability remain a differentiator?
In a more selective cycle, sustainability and traceability become essential markers of perceived value. Responsible materials, repairability, high-level after-sales services, and transparent supply chains are loyalty that strengthen brand preference, even when price dynamics are constrained. This is also an area where Kering can capitalize on its historical advantage to regain the trust of customers and investors.
What to watch out for in the second half of the year
-
Traction of the Gucci offer . Quality of reception of new capsules and turnover in store.
-
North America and Europe . Maintaining local non-tourism purchases and responding to price adjustments.
-
Asia Pacific : signs of stabilization, particularly in mainland China.
-
Margin mix , contribution from Eyewear and Beauty , cost discipline and capex.
-
Strategic speech by the new CEO and execution milestones at 6 and 12 months.
In summary
The 15 percent decline in comparable sales in the first half of 2025 presents Kering with a moment of truth. The group possesses real strengths, powerful brands, and solid business expertise, but must execute swiftly on its priorities. Reinvigorating Gucci , enhancing the customer experience , judiciously reallocating resources, and leveraging more resilient divisions will be crucial to reversing the downward spiral and restoring profitability . The coming quarters will reveal whether the turnaround has begun.
