Kering's recovery will take longer than expected The Group, which is currently undergoing a period of major change, is concerned about the situation in the Middle East
The entry into the field of Luca de Meo at the top of the Kering administration began almost a year ago, a few months after the worsening of the clashes in the Middle East. The socio-political tensions of the region have strongly hit all the main European luxury conglomerates that have always focused on the commercial hub of Dubai, resulting in a loss of value on the stock market for the entire fashion industry of 100 billion dollars. The effects of the war are evident in the report relating to the sales of Gucci, Kering’s flagship brand, down by 8% in the first quarter of 2026. Compared to the expectations of analysts, who foresaw losses of 4.3%, this result outlines a more delicate recovery phase than expected for the French conglomerate.
The slow but constant turnaround of Gucci
In addition to the tensions in the Middle East and the consequent decline of luxury tourism in the region, another factor that seems to have particularly influenced the drop in Kering’s sales is the process of rebalancing started by de Meo both within the group and at Gucci. From his settlement, the CEO has changed the management of the company, then anticipating the insertion in store of the collections after the Fashion Week. Also in the last twelve months, Gucci has welcomed a new creative director, Demna, who had covered the same position at Balenciaga (a brand always Kering) for ten years.
Gucci continues to be the most important brand for the conglomerate, given that it represents 60% of the total profit of Kering. Nevertheless, the Florentine Maison has been facing financial obstacles for much longer than the insertion of de Meo in the company, which explains the radical attempts of relaunch implemented by the new management of the group. With Demna and with the new CEO, Gucci has the occasion to start again, but according to the results of this quarter it could take more time than expected.
The numbers
In detail, Kering has reported a decrease of sales in physical retail and online of 2%, compared to a growth of 6% in the wholesale channels. This last data seems to be supported in particular by the eyewear segment, with Kering Eyewear that has surprisingly registered the best quarter ever with revenues in increase of 3% for a total of 489 million euros. The division that instead has reported decreases of sales is Fashion & Leather Goods, which has registered losses of 9% even if in rise compared to the previous quarters.
Together with Kering Eyewear, the division Kering Jewelry drives the sales of the group with a record of growth of 14%, equal to 269 million euros. Direct sales have shot up to 28% in Japan and Asia, reports the group, with the wholesale that here has grown of 14%. The brands more performing have been Boucheron and Pomellato, with the first that takes the title of brand more in growth of the first quarter of 2026. In the Middle East, the group has reported a decrease of sales of 11%, but for the chief financial officer of Kering, Armelle Polou, the war has influenced this result only for 1%.
Comparisons and strategies
All in all, the group positions itself in advantage compared to the competitor LVMH, that even having registered an organic growth of 1%, this quarter has reported decreases of general sales also in the more established divisions of the group, like leather goods, besides a situation of stagnation in cosmetics and perfumery. Kering, in the last year, has instead sold its own beauty division to L’Oréal SA for 4 billion euros.
In a communication shared by Kering, Luca de Meo reassures the investors underlining that the project of relaunch of Gucci is still in becoming: «Gucci remains our top priority. A far-reaching transformation is underway, based on structural interventions in terms of customer experience, distribution network and, above all, product. We have therefore rethought the structure of the offer and clarified the priorities by category, initiating the gradual arrival of new collections in boutiques over the course of the year.»