In 2025, the luxury group Kering faces a delicate situation as its net profits plummet by 62% and its sales record a decrease of 12%. This decline is mainly attributed to the disappointing performance of its iconic brand, Gucci. The departure of creative director Alessandro Michele left a void that his successor has failed to fill, further highlighting the ongoing difficulties. In a context where even its rival LVMH feels the effects of the Chinese economic downturn, Kering must rethink its strategy to recover. The group has made a series of major appointments within its houses, hoping to reverse the trend and revitalize its revenue, notably through strong artistic direction at Gucci, essential for regaining ground.
Kering facing the economic storm
The luxury group Kering is facing a real economic storm, with a significant drop in its profits by 62% in 2024. This loss highlights a worrying trend for the group, whose revenues have also fallen by 12%. One of the main factors behind this debacle is the underperformance of the brand Gucci, the flagship brand of the group. Following this unflattering assessment, Kering hopes to turn the situation around by appointing a new creative director to try to revitalize Gucci’s image and sales. Despite these challenges, Kering continues to innovate and adjust to remain a major player in the global luxury market.
Gucci: A flickering flame
The decline in Gucci‘s performance has had a disproportionate impact on the entire Kering group. Once considered the golden goose with exponentially growing revenues, Gucci has seen its sales drop by 23% to 7.7 billion euros. After the departure of its iconic creative director, Alessandro Michele, the brand has experienced a slump despite the appointment of Sabato de Sarno. The volatility of luxury consumption, exacerbated by external factors such as the slowdown of the Chinese economy, has only worsened the situation.
The luxury market facing global challenges
In addition to internal turmoil, Kering and other luxury groups such as LVMH are facing external pressures, particularly the reduction of consumption in China. This decline persists and weighs heavily on overall sales in the luxury sector. The Chinese economy, long a driver of growth for luxury brands, is showing signs of weakness, forcing companies to rethink their strategies and diversify their markets. With the constantly evolving markets, Kering’s ability to adapt to these new dynamics will be crucial for its future.
