Valentino faces the challenge of the luxury slowdown

An iconic brand caught up in a less favorable cycle

In the world of fashion, Valentino House embodies a certain idea of ​​Roman glamour. An evening gown. A spectacular drape. An instantly recognizable red. A look that transcends decades. The Italian brand boasts a strong history, an international clientele, and a major presence on the red carpet. Yet no luxury house remains entirely immune when the market slows. After the post-pandemic euphoria, consumption of Italian luxury has become more selective. Customers compare more. They question the price. They look for a memorable piece. They also want visible quality. This new cycle does not condemn the major fashion houses. It requires a more nuanced understanding of desirability, the product, distribution, and service. Valentino is precisely going through this phase. In 2025, its revenue declined by 15%, to €1.12 billion. The house recorded a operational loss of €103 million, compared to an operating profit of €31 million in 2024. This distinction is important. It is not a net loss, though the term used is the same, but a negative operating result. This figure reveals commercial pressure, a demanding cost structure, and a need for adjustment.

What the numbers really say: decline in activity, loss, debt

A drop in revenue indicates a decline in business activity. Several factors can contribute: lower foot traffic in certain stores, more erratic demand, more cautious customers, a slowdown in a key region, a decrease in wholesale, or a less successful offering in a specific category. The decline doesn't tell the whole story, but it does raise a red flag. An operating loss provides another layer of analysis, showing that revenue is no longer adequately covering day-to-day operating expenses. In a fashion house, costs remain high: premium boutiques, fashion shows, campaigns, logistics, high-quality materials, workshop salaries, digital development, quality control, and after-sales service. Every aspect contributes to the overall experience Valentino GaravaniNet debt also increased in 2025, reaching €1.13 billion according to IFRS 16. Excluding lease liabilities, it rose from €377 million to €472 million. This context explains the focus on financing. It underscores a simple reality: desirability must be supported by rigorous financial discipline.

Why is the slowdown in the luxury sector hitting harder than we imagined?

The slowdown in the luxury sector isn't simply due to a decline in purchasing power. The phenomenon is more complex. Successive price increases have changed perceptions of value. Customers want to understand what they're paying for. They examine the cut, the leather, the finishes, the durability. They expect a genuine emotional connection. The logo alone is no longer enough Asian market This plays a significant role in the equation. Valentino has projected a decline across all regions by 2025, with particularly sharp drops in Japan and Asia-Pacific. For a brand exposed to international buying, this type of shift quickly impacts sales volumes. It also alters priorities regarding product assortment, communication, and in-store promotions. Competition further reinforces this requirement. Large groups wield considerable media power. Independent labels capture attention with their radical aesthetics. Niche brands sometimes excel in customer proximity. Valentino must maintain its position: couture romanticism, Roman sophistication, assertive femininity, and a more theatrical than minimalist vision.

Valentino, a positioning to defend between couture, desire, and volume

The economic model of Valentino It rests on a delicate balance haute couture It creates the dream. The fashion shows feed the images. The silhouettes dress the celebrities. Leather goods, shoes, accessories, and small leather pieces further enhance the volumes. Each universe must speak the same language. A house loses its strength when its categories seem to come from different worlds. Valentino's strength also lies in its already established signatures. The Valentino RossoThe nails RockstudFormal silhouettes. Valentino Garavani bags. Slingback pumps. Details inspired by Roman architecture. The Rockstud remains presented by the house as one of its iconic codes, forged from this Roman reference. These signatures, however, must remain vibrant. An iconic code cannot become a mere repetition. It must evolve with the wardrobe, the season, and new trends. A client isn't simply looking for a symbol. She's looking for a piece that reflects her personality. She wants comfortable shoes. A practical bag. A jacket that accompanies her throughout the day. A look that creates a lasting memory.

Shareholders, financial support: what exactly are we talking about?

Shareholder support is more than just a message of confidence. It provides concrete resources. In 2025, Valentino's shareholders injected €100 million. New financial commitments have been formalized for 2026. This decision follows a year of strained results and then an increase in debt. It gives the brand a much-needed boost. The shareholding structure matters. Mayhoola owns 70% of Valentino. Kering owns the remaining 30%, acquired in 2023. The partnership is therefore significant. It combines a Qatari investor already heavily involved in fashion with one of the major French luxury players. This configuration can facilitate certain industrial exchanges, expertise, and synergies. Financial support helps preserve the essentials: the workshops, the suppliers, the talent, the strategic boutiques, the digital investments, and the ability to launch an ambitious collection. A brand that cuts too quickly in its creative output risks losing its identity. A brand that cuts too much in quality risks losing its clientele. Luxury is built over years. It can sometimes be fragile in a single season.

2026, a pivotal year for Maison Valentino

The year 2026 appears to be a pivotal one. Shareholders have extended their support. The company is continuing its repositioning efforts. The capital structure has also evolved. In September 2025, Mayhoola and then Kering postponed the planned deadlines for the acquisition of the remaining Valentino assets. The put options have now been deferred to 2028 and then 2029. Kering's purchase option has been pushed back to 2029. Successful transformations are rarely spectacular. They lie in the details: a better-managed delivery schedule, more precise inventory allocation, a coherent pricing structure, a smoother e-commerce experience, a more personalized boutique service, key pieces available at the right time, and communication that focuses on the garment itself, not just the runway show. The challenge lies in increasing the quality of sales. A sale at full price is not the same as a sale made after a discount. A piece sold in a profitable boutique does not have the same impact as an item languishing in stock. A strong company does not seek volume for volume's sake. It seeks selective growth, consistent with its level of standards.

The crux of the matter: distribution, stocks, full price

Distribution is a balancing act. Too much presence can trivialize a brand. Too little presence closes doors to customers ready to buy. The right strategy depends on the city, customer traffic, customer profiles, and the potential of each category. A store must become a place of desire, not just a point of transaction. Inventory management becomes crucial when demand slows. Excess stock ties up cash flow and can lead to clearance sales. It can also undermine the perception of scarcity. Conversely, insufficient stock creates frustration. The solution lies in faster forecasting, better-paced production, and constant communication between the design studio, retail, and product teams. Full pricing remains the best ally for brand image. It protects margins and the perception of value. To achieve this, the product must be compelling at first glance. The customer must feel the difference: a sturdy closure, supple leather, a perfect cut, an easy-to-wear dress, a bag that remains beautiful over time. The details become proof.

Creation, continuity: Alessandro Michele confronts the Valentino legacy

Creativity is an economic factor. It can put a brand back on the global map. It can revitalize a category. It can attract a new generation. At Valentino, this responsibility is borne by Alessandro Michele, appointed artistic director in April 2024. He oversees the women's, men's, accessories, and haute couture collections. His arrival opened a new chapter. His language is more abundant. More erudite. More narrative. He loves references, layering, and silhouettes steeped in history. This style can give Maison Valentino a unique scope. It also demands perfect commercial clarity. The customer must recognize the vision. They must be able to adopt it into their own life. Couture can serve this ambition. In 2026, the house further emphasized its haute couture universe around Specula MundiPresented as a visual reinterpretation of the collection by Alessandro Michele, this cultural presence confirms that couture remains a major narrative element for Valentino.

Luxury marketing in 2026: less noise, more precision

THE luxury marketing can no longer rely solely on visibility. Massive campaigns create presence. They don't always create preference. In 2026, brands must tell a more precise story. A story of cut. Of fabric. Of gesture. Of person. The product must once again become the hero. CRM is another lever. A loyal customer expects personalized attention. A relevant invitation. A private appointment. Meticulous alterations. Early access. A helpful recommendation. Data must support the relationship. It must never replace it. In luxury, good service seems natural. It is never intrusive. Accessories can also contribute to this strategy. Since January 1, 2026, the global partnership between Valentino and then Kering Eyewear has come into effect. The first eyewear collections developed within this framework constituted a significant launch for Kering Eyewear in the first quarter of 2026. This category can enrich the brand universe with more accessible pieces, without compromising aesthetic standards.

Costs, investments, know-how: where does the profit margin lie?

A high-profile brand is not automatically a profitable one. The fixed costs of luxury are considerable: rents in prime locations, specialized salaries, prototypes, rare fabrics, embroidery, photography, fashion shows, international logistics, security, and digital systems. In a year of declining sales, these expenses weigh more heavily on every euro earned. The right approach is to seek efficiency without compromising the core of the product. This involves negotiating better deals on certain purchases, improving planning reliability, reducing duplication, optimizing production runs, better coordinating deliveries, and strengthening traceability. The most valuable gains are often invisible, yet they improve margins, availability, and service levels. The supply chain must also remain under close scrutiny. In April 2026, an Italian court prematurely ended the receivership of Valentino Bags Lab after strengthening governance mechanisms, supplier qualification, and subcontracting controls. This episode serves as a reminder of a crucial imperative for the entire sector: a Italian know-how Credibility is based on quality, but also on rigorous production conditions.

What shareholder support reveals about the sector

The support given to Valentino reveals a conviction. Luxury remains attractive in the long term. It rests on rare brands, creativity, and expertise that is difficult to replicate. Yet, the sector has become more demanding. A great history is no longer enough. Execution must follow. The strategy must be transparent. The results must progressively validate the investment. The Valentino case also demonstrates the importance of industrial partnerships. Kering brings recognized expertise in accessories, retail, eyewear, and global communications. Mayhoola brings a heritage vision, knowledge of luxury, and the capacity for support. Their shared role must remain consistent with the brand's identity. Valentino cannot become an interchangeable brand. In the coming months, observers will be watching several indicators: the growth of direct sales; the performance of handbags; the return of shoes; inventory turnover; cost control; the reception of Alessandro Michele's collections; and the ability to retain loyal customers and then attract new ones.

Valentino tomorrow: questions from customers, professionals, and investors

For customers, the immediate question is: Will Valentino continue to offer pieces that justify their price? The answer isn't found in a slogan. It's found in a dress that drapes perfectly. In a bag that ages gracefully. In a comfortable pump. In a color that remains unforgettable. In attentive after-sales service. The house possesses real strengths: a history, established codes, a unique position at the intersection of haute couture, glamour, and accessories, a new artistic chapter, and committed shareholders. The current period remains delicate, but it could also be pivotal. Valentino doesn't need to make more noise. Valentino needs to be more authentic.

Sources

• Kering, “Evolution of the shareholders’ agreement relating to Valentino”, September 10, 2025.
• Valentino House, "History", information on the artistic direction of Alessandro Michele.
• Kering Eyewear, presentation of the global partnership with Valentino, effective from January 1, 2026.