Kering, the French luxury conglomerate, is facing a tough start to the year. According to the group’s Q1 2025 financial results announced on April 23, revenue for the January–March period totaled €3.88 billion, down 14% year-on-year — a stark indication of slowed momentum across the group’s portfolio.
The biggest contributor to the downturn was the continued underperformance of its flagship brand, Gucci. Sales at Gucci plunged 25% on a comparable basis, with directly operated stores down by the same percentage and wholesale revenues plummeting 33%. The results reflect a decline in in-store traffic, as well as a product offering that appears to be falling short of consumer expectations.
Former Artistic Director Sabato De Sarno, who sought to reestablish Gucci’s timeless appeal, stepped down earlier this year after less than two years in the role, failing to deliver the impact investors had hoped for. In March, Kering announced that Balenciaga’s Demna would succeed him as Gucci’s new Artistic Director. Demna is currently preparing his final couture collection for Balenciaga and is set to officially take the reins at Gucci in July.
Geographically, sales were down across all major markets. The Asia-Pacific region posted a 25% drop, while both Western Europe and North America saw declines of 13%. Japan followed with an 11% decrease. Other Kering brands also struggled: Saint Laurent dropped 9%, and the “Other Houses” category, which includes McQueen and Brioni, fell 11%. One exception was Bottega Veneta, which recorded a 4% increase in revenue thanks to solid performance across all product categories. Kering Eyewear and Kering Beauté also posted stable growth.
Chairman and CEO François-Henri Pinault commented on the results, saying: “As we had anticipated, Kering faced a difficult start to the year. In this environment, we are fully focused on executing on our action plans to reach our strategic and financial objectives and strengthen the positioning of our Houses on all our markets. We are increasing our vigilance to weather the macroeconomic headwinds our industry faces, and I am convinced that we will come out stronger from the present situation.”
Today, the focus for investors and fashion insiders is not just on whether Gucci can recapture its former glory. While anticipation is high for the new creative era under Demna beginning in July, creative renewal alone may not be enough to reverse the tide.
Kering’s broader challenges extend beyond design. The group must also navigate a range of external factors — from U.S. tariff policies to weakened consumer sentiment in Asia — that continue to weigh on the luxury sector. As Kering seeks to balance brand strategy with geopolitical and economic volatility, the question remains: is the group on the brink of a new era of growth, or is it facing a prolonged period of adjustment? The tipping point may already be here.
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