Kering’s Crisis Deepens: Gucci and Saint Laurent Sales Plummet Amid Luxury Slowdown
Paris, France – July 29, 2025 – French luxury conglomerate Kering is grappling with a deepening crisis as its flagship brands, Gucci and Yves Saint Laurent (YSL), reported significant sales declines in the first half of 2025, according to recent financial disclosures. The group, which also owns Bottega Veneta, Balenciaga, and Alexander McQueen, saw its overall revenue drop 15% to €7.6 billion, with operating income falling 39% to €969 million, driven largely by struggles at Gucci and YSL.
Gucci’s Steep Decline
Gucci, which accounts for nearly half of Kering’s revenue and two-thirds of its profit, saw a 25% year-on-year sales drop in Q2 2025, continuing a troubling trend from a 24% decline in Q4 2024. The brand’s revenue fell to €1.6 billion in Q2, with a 38% drop in wholesale revenue and a 25% decline in directly operated retail sales. Analysts attribute Gucci’s struggles to a failure to resonate with consumers, particularly in Asia-Pacific, where sales dropped 25%. The brand’s shift from Alessandro Michele’s maximalist aesthetic to Sabato De Sarno’s more restrained designs has yet to gain traction, with new collections accounting for only a third of sales. Kering’s recent appointment of Demna Gvasalia as Gucci’s creative director, effective post-Balenciaga’s July 2025 couture show, has sparked skepticism, with shares dropping 12% upon the announcement.
Yves Saint Laurent’s Slide
Yves Saint Laurent, Kering’s second-largest brand, reported a 10% sales decline in Q2 2025, following a 9% drop in Q1. Sales reached €670 million in Q3 2024, with a 20% decrease in wholesale revenue. Despite some improvement in North America and Asia-Pacific, YSL’s performance has been hampered by lower store traffic and a broader luxury market slowdown. The brand’s focus on iconic handbags and new leather goods has been well-received but insufficient to offset market challenges.
Bright Spots and Strategic Shifts
Bottega Veneta emerged as a rare positive, with a 2% sales increase to €397 million in Q2 2025, driven by a 12% rise in Q4 2024 retail sales. Kering’s eyewear division also grew 3%, reaching €440 million, bolstered by acquisitions like Lindberg and Maui Jim. To address the downturn, Kering is closing approximately 50 of its 1,800 stores, focusing on underperforming Gucci outlets in China, and streamlining distribution to enhance exclusivity. New leadership, including Luca de Meo as group CEO starting September 2025 and Stefano Cantino as Gucci’s CEO, aims to stabilize operations, though analysts remain cautious about a quick recovery.
Market and Economic Pressures
Kering’s woes reflect a broader luxury sector slowdown, with rivals like LVMH reporting a 3% sales drop in Q1 2025. Weak demand in China, exacerbated by a property crisis and faltering consumer confidence, has hit Gucci hard, as the region accounts for 50% of its turnover. U.S. sales have also softened amid trade war uncertainties under President Donald Trump, though Kering noted stable American demand in early 2025. The group projects modest growth and low profitability in H1 2025, with a potential rebound in H2, but macroeconomic headwinds and tariff threats loom large.
Outlook and Challenges
CEO François-Henri Pinault, who will transition to chairman in September, emphasized cost control and selective investments to navigate the crisis. However, analysts warn that Gucci’s turnaround, critical to Kering’s recovery, may be delayed by Demna’s upcoming collections and ongoing market volatility. Posts on X reflect investor frustration, with some calling Gucci’s high-margin model “broken” after a 50% profit drop. Kering’s stock has fallen 50% over the past year, underperforming peers like LVMH and Hermès, which have shown greater resilience.
As Kering bets on new leadership and a refined brand strategy, the road to recovery remains uncertain. The group’s ability to revive Gucci’s allure and stabilize YSL in a challenging luxury market will be pivotal to reversing its fortunes.
This article draws on recent financial reports and posts on X. Readers should consult primary sources for the latest updates.