Kering SA, the Paris-based luxury goods maker, is seemingly treading on a tightrope with revenue streams drying up due to lower sales. The French holding company, which owns Gucci and Balenciaga, plans to close hundreds of additional stores after a net reduction of 75 locations in 2025.
Store Closures, a Strategic Reset
The decision to close stores of various brands, including Gucci and Alexander McQueen, has been a strategic call. Of the net store closures in 2025, nearly 40% were of Gucci. Going forward in 2026, Kering is already moving forward with a plan to close 100 stores, while few more stores are under scrutiny of getting terminated, CEO Luca de Meo hinted in an earnings call with analysts.
Fewer Stores, Higher-Quality Footprint
Change of plans, restructuring the operations, and squeezing in the number of operational stores can strategically benefit in a longer run as the corporation aims to restore sustainable performance.
Operating with 75 fewer stores in 2025 translated in a 8% drop in inventories, while maintaining a higher-quality retail footprint, resulting in a cost saving to the tune of EUR 925 million ($1.056 billion).
| Kering Store Closures in 2025 | ||||||
| Brand | Region | Net Closures for a Brand | ||||
| North America | Asia Pacific (ex-Japan) | Western Europe | Japan | Rest of the World | ||
| Gucci | -3 | -14 | -6 | -8 | -1 | -32 |
| Yves Saint Laurent | -3 | -3 | 1 | -1 | 0 | -6 |
| Bottega Veneta | 2 | -9 | -3 | -3 | 3 | -10 |
| Other Houses | -7 | -16 | -5 | -4 | 5 | -27 |
| Net Closures (Region-Wise) | -11 | -42 | -13 | -16 | 7 | -75 |
Source: Kering
The world’s second-largest luxury apparel retailer is increasingly focusing on improving its agility, sustainability while managing to preserve the craftsmanship of its products. Lowering the number of brick-and-mortar stores does not always imply that a company is lessening the avenues of sales.
Kering is assessing the store network constantly with an aim to resurrect the brand by maintaining fewer stores with presence in more stronger and strategic locations across the globe.
The company plans to continue closing underperforming stores that fall below regional sales benchmarks. The total reduction in the number of stores was done on similar lines in 2025, as the brand opened 58 new stores and closed 133, resulting in a net drop of 75 stores.
Luxury Learns to Live Lean
Kering is working with a unified aim to bolster its presence at strategic locations, at a time when revenue is shrinking.
Last year, a new Bottega Veneta store started operations in New York’s Meatpacking District, whereas a new flagship Saint Laurent store began on Avenue Montaigne in Paris. Such collective decisions reflect better positioning of the brand, while reducing the stores that are marginally contributing to the sales mix.
Kering’s cash cow Gucci will face nearly one-third of the closures as a large part of the decline in revenues is attributed to it. In fiscal year 2025, the revenue from Gucci dropped nearly 19% to EUR 5,992 million ($7.07 billion) as compared to EUR 7,650 million ($9.03 billion) in the previous financial year, company financials showed.
However, a large part of store closures will happen in Asian markets, with nearly 40% of them occurring in 2026 alone. Likewise, in 2025, the brand shuttered 32 stores, mainly in Japan and the Asia-Pacific region.
Profits Collapse, Patience Thins
The Groupe Artémis-controlled Kering is envisaging a turnaround under the leadership of new CEO Luca de Meo. The stock price of Kering has seen a 75% upswing from April 2025’s bottom, with the official announcement of a new CEO coming in the middle of June 2025. Nevertheless, the share price gain still remains marginal as investors are looking forward to interpreting meaningful gains in the company’s financial performance.
The net income of the group plunged as much as 94% to EUR 72 million ($78.48 million) as against the total income of EUR 1,133 million ($1.235 billion) in the comparable period last year, Kering reported. The investor class won’t buy the restructuring story for long if the margins keep falling and operating income continues to show signs of weakness across the portfolio of brands under Kering.
A Stock Searching for Confidence
Shares of Kering have witnessed sharp corrections over the years due to weaker sales, market-wide slowdown in growth of luxury products post-COVID period, inappropriate price hikes, changing market conditions and feeble demand in Chinese markets.
The stock of Kering has eroded nearly 54% of its value in the last three years. Kering shares ended at EUR 272.90 on February 17, 2026, down 53.75% from the closing price of EUR 590, recorded on February 17, 2023, the data from Euronext Paris showed.
In the meantime, the headline CAC 40 index has registered a growth of a little over 14%. On a 5-year scale, Kering’s shares are down more than 48%, whereas the CAC 40 has grown nearly 45%.
On the flipside, shares of homegrown competitor Hermes have more than doubled the investors’ wealth in the last five years. The stock of Hermes International has amassed a growth of 115% to EUR 2,072 on February 17, 2026, from the closing price of EUR 963.60 witnessed on February 19, 2026.
Monetizing Beauty to Fund the Reset
Kering has entered into an agreement with L’Oréal to sell its beauty division Kering Beauté for nearly EUR 4 billion ($4.72 billion). The company expects to finalise the deal as early as 2026. This deal is likely to augment Kering’s financial position while reducing the debt burden as the company wishes to operate with more sustainable financials.
Under the deal, L’Oréal will have a 50-year-long licensing agreement with Kering to develop beauty products for the former’s brands, including Balenciaga, Bottega Veneta and Gucci and acquire the House of Creed.
Kering: 2026 and Beyond
The business restructuring, store rationalization, strategic decisions and pre-emptive actions by Kering have the potential to turn around the fortune for the ailing luxury brand.
However, the year-after-year periods of bleak sales, unattractive margins and operating income have hammered the stock repeatedly. Investors across the globe will be eyeing the upcoming quarterly revenue figures set to be announced on Tuesday, April 14, 2026.
“Kering enters 2026 with a clear objective: to return to growth and improve margins this year. In a still uncertain macroeconomic environment, the Group prioritizes flawless execution, equipping each House with sharper, more sustainable brand strategies and the operational support required to accelerate progress,” the company said in a statement while announcing the financial results.
