Gucci carried 60% of Kering's profit — then fell 22% and the bill arrived

For years Kering's accounts were really Gucci's accounts: the Florentine house generated 41% of group sales and more than 60% of recurring operating profit. Then Gucci's sales began to fall. Presented on 10 February 2026, Kering's FY2025 results showed the dependence priced in full: group revenue of €14.67 billion, down 13% (restated of the Beauty division); Gucci down 22% for the year at €6 billion; and net income of €72 million — divided by more than ten versus 2024.

The response under Luca de Meo, CEO since September 2025, was a four-part triage. Cash: the Beauty division was sold to L'Oréal for $4 billion, closing in the first half of 2026, helping cut net debt by €4.7 billion to €3.3 billion by June 2026. Footprint: after 75 net store closures in 2025, another 84 were shut in the first half of 2026 against a target of 100 for the year — a 5% reduction of the directly operated network. Portfolio: Alexander McQueen, 5% of sales but heavy losses, was put into strategic review with job cuts on the table.

The plan was presented at a Capital Markets Day in Florence on 16 April 2026 under the name 'ReconKering'. By the first half of 2026 the group was back to comparable growth (+1%), with Gucci's decline narrowing to -2% in the second quarter on new handbag lines. But the arithmetic of the crisis year remains: one brand carried the group, the brand stumbled, and the group spent €4 billion of assets and 159 stores to buy itself a second chance.

Sold the beauty arm to L'Oréal for $4bn and closed 159 stores to cut debt by €4.7bn, buying a second chance.

Letting one brand supply over 60% of operating profit is not diversification — it is a single point of failure with a portfolio attached

Kering spent the Gucci boom paying for other houses instead of de-risking the dependence, so when Gucci fell there was no cushion, only debt: €8 billion at end-2025

Store closures follow revenue with a lag — the network had been built for sales levels that were already gone, and 159 closures in 18 months is the unwinding

Selling the beauty division to L'Oréal raised cash but surrendered the group's most stable cash-flow line to its biggest rival — a measure of how urgent the balance sheet had become

A portfolio is only as diversified as its profit mix — when one house earns 60% of the operating profit, the group has one business, and its downturn becomes a restructuring.

Kering entered 2026 with net debt cut to €3.3 billion, the L'Oréal beauty deal closing, and the ReconKering roadmap running: fewer stores, a portfolio ranked by priority, and Gucci rebuilt around its heritage lines. H1 2026 brought the first comparable growth in two years (+1%), with Gucci at -2% and improving. Against FY2025's €72 million net income, that is the size of the climb left.