What: Kering continues aggressive cost-cutting and portfolio streamlining as Gucci outperforms expectations, despite persistent group revenue declines.

Why it is important: Kering’s actions demonstrate the necessity of rapid restructuring and regional rebalancing to maintain competitiveness in a challenging luxury environment.

Kering is intensifying its restructuring efforts, focusing on cost reductions, store closures, and the sale of noncore assets as it seeks to restore profitability and reduce debt. Despite a 10 percent drop in group revenues in the third quarter, the company saw a glimmer of hope as Gucci’s sales decline slowed to 14 percent, outperforming market expectations and marking an improvement from previous quarters. The group’s new CEO, Luca de Meo, is preparing to unveil further radical measures, including continued network rationalization and a strategic partnership with L’Oréal following the sale of Kering’s beauty division. These moves are designed to streamline operations and refocus on core brands, with Gucci’s creative leadership generating renewed digital engagement and positive consumer response. Regional performance remains mixed, with North America showing signs of recovery and Asia-Pacific stabilizing, although Chinese demand is still subdued. Kering’s approach underscores the importance of agility and decisive action in navigating ongoing uncertainty in the luxury sector.

IADS Notes: Kering’s current strategy is a continuation of decisive cost-cutting and asset management measures seen throughout 2025, including major store closures and the sale of The Mall Luxury Outlets (WWD, July 2025; WWD, January 2025). These actions, prompted by profit declines and Gucci’s earlier struggles (BoF, April 2025; WWD, February 2025), reflect a broader industry trend toward operational efficiency and regional rebalancing. The group’s pivot to the US market and ongoing portfolio streamlining align with sector-wide responses to persistent weakness in China and Japan, as documented in Inside Retail, January 2025.

Kering Q3 2025: 10% drop in group revenues, cost cuts and glimmers of hope