What: Kering accelerates cost-cutting measures with 80 store closures while maintaining its brand portfolio, as Gucci sales decline 25% in Q2 2025 and group’s net profit plummeted 46% in the first half.

Why it is important: The decision to accelerate store closures while retaining underperforming brands highlights the delicate balance between immediate financial pressures and long-term strategic positioning in luxury retail.

Kering's strategic transformation is intensifying as the French luxury group prepares for incoming CEO Luca de Meo's arrival in September. The company has expanded its store closure target to 80 locations in 2025, up from the initially planned 50, with 41 shutdowns already completed in the first half. This restructuring comes amid challenging financial results, with group revenues falling 18% to 3.7 billion euros in Q2, and Gucci experiencing a significant 25% decline in organic sales. Despite these headwinds, Kering maintains its commitment to its brand portfolio, refusing to divest underperforming labels while focusing on operational efficiency. The company's financial outlook remains pressured, with recurring operating profit plummeting 46% in the first half. Bottega Veneta emerges as a moderate bright spot with 1% growth, while Saint Laurent and other houses face declines of 10% and 16% respectively. The group's comprehensive cost-reduction strategy includes real estate optimisation, generating 1.5 billion euros from asset refinancing in the first half, with an additional 1.7 billion euros projected.

IADS Notes:

Kering's latest results in July 2025 represent the culmination of a challenging transformation period that began in October 2024 with the implementation of comprehensive austerity measures. The current announcement of 80 store closures, up from the initially planned 50, builds upon the strategic consolidation efforts that included the €350 million sale of The Mall Luxury Outlets to Simon Property Group in January 2025. While Gucci's continued 25% decline in sales mirrors the performance seen in April 2025's Q1 results, the varying performance across the portfolio, with Bottega Veneta showing modest growth, demonstrates the complex challenge of managing multiple luxury brands in a deteriorating market. The decision to retain underperforming brands while focusing on cost reduction reflects Kering's long-term commitment to portfolio diversity, even as it implements significant operational restructuring under incoming CEO Luca de Meo.

Kering’s net profit plummeted 46% in H1 2025, deepens cost cuts