Is luxury slowing down? Inside Kering’s reset—and what went wrong at Gucci
Luxury is entering a more uncertain phase. Kering’s reset shows what is changing, what went wrong at Gucci and what may define its next phase
Luxury was not supposed to slow down. For more than a decade, the sector operated on the assumption that growth could be sustained almost indefinitely: demand appeared resilient, and expansion felt natural. That equation is now visibly under strain, in financial results as well as in the assumptions that once underpinned them.
Kering’s latest strategic reset, outlined at the Stazione Leopolda in Florence to investors, journalists and insiders, is a multi-year restructuring plan called “ReconKering”. It responds to a difficult year for the group, while also reflecting how luxury operates when brand power alone is no longer sufficient to absorb market volatility, and structure becomes as important as desirability.
The initiative marks a reorganisation of Kering’s operating model—spanning financial discipline, brand management and distribution strategy—and signals how the holding company is reading the current phase of luxury, in which the foundations that once steadily supported it have begun to lose coherence.
By working on the group’s structure while continuing to operate at scale, ReconKering brings together measures on costs, retail footprint and product strategy, alongside a reassessment of how demand is managed.
Gucci, of course, sits at the centre of ReconKering. It remains one of the most established names in fashion, yet is no longer capable of stabilising the system around it as it once did. What is unfolding is a shift that offers a clearer view of the limits of the previous growth model—and begins to sketch the shape of what may replace it.
Is the Luxury Boom Over—or Entering a More Uncertain Phase?
Not long ago, luxury operated under conditions that favoured constant growth, with brands extending their reach with relative ease and scale reliably translating into strength. Across the industry, analysts and investors are now asking whether the slowdown will continue, as the conditions that once supported steady expansion have shifted and show little sign of returning.
Kering’s figures tell the story clearly. Revenues fell from around €20 billion in 2022 to €14.7 billion in 2025, while margins have come under increasing pressure. Gucci remains one of the most respected maison in the sector, yet its contribution no longer offsets fluctuations across the wider group as it once did. Luca de Meo addressed this directly, pointing to a market no longer sustained by momentum alone.
ReconKering is a response grounded in adjustment, in a phase where growth demands more structure and previous models offer fewer guarantees.
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What Kering’s Reset Reveals About the Future of Luxury
To read ReconKering as a standard strategic plan would be to miss its point. The approach is organised in stages, beginning with structural work before moving toward recovery and longer-term positioning.
Kering is working across a multi-year horizon. The immediate focus is on stabilising the base—financially and operationally—before moving toward what it defines as leadership in “Next Luxury” by the end of the decade.
That progression explains why the current actions feel grounded and, at times, unglamorous. Debt is being reduced, the retail network is being reconsidered, and product ranges are being simplified—decisions that sit beneath the surface yet determine how the entire system holds together.
What Went Wrong at Gucci—and Why It Matters Beyond the Brand
Gucci remains at the centre of Kering’s identity, carrying both its strongest recognition and its most complex challenges. The brand has maintained cultural visibility and global reach, though its expansion across categories and markets has introduced some dispersion that is now being addressed. This has prompted broader questions around what went wrong at Gucci in recent years.
De Meo’s framing suggests a brand that has stretched itself beyond a comfortable equilibrium. The response focuses on restoring coherence: product assortments are being reduced, distribution is becoming more selective, and Demna’s new creative direction is being aligned more closely with the elements that sustain demand over time. The distinctive character of Gucci remains intact, although the structure around it is being tightened.
The underlying concept is one of discipline as a stabilising force, allowing the brand to concentrate its energy without diluting its identity.
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From Expansion to Selectivity: How Luxury Retail Is Being Rewritten
Kering’s retail strategy follows a similar line of thinking. The group is gradually reducing its store count, moving away from a model where presence in as many locations as possible was considered inherently advantageous.
A more selective approach emphasises the quality and impact of each space. Stores are treated as environments that shape perception as much as they drive sales, which changes how their value is measured.
When distribution becomes too widespread, it erodes the sense of distinction that luxury relies on. Pulling back refocuses attention on controlled exposure, where fewer locations support a clearer narrative.
How Luxury Brands Are Rebuilding Their Operating Models
Alongside these visible changes, Kering is reorganising its internal structure to bring different functions closer together. The group is strengthening its industrial capabilities, investing in customer insight, expanding its technology infrastructure and reinforcing its sustainability.
The result is a more systematic way of operating. Decisions are grounded in a deeper analysis of customer behaviour, while operational processes become more tightly interconnected.
The emphasis shifts toward understanding demand with greater precision, allowing creative and commercial decisions to align more closely.
Why Fewer Products May Define the Next Era of Luxury
The simplification of product ranges sits at the centre of this transformation. Collections are becoming more focused, with fewer variations and tighter inventory control—a clear move away from the expansive logic that defined much of the previous decade.
The change influences how brands engage with their audience. Instead of maintaining a constant flow of options, the emphasis moves toward delivering relevance at specific points, with greater attention to timing and coherence. The result is a model that prioritises clarity over volume.
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Where Kering Is Looking for Growth Beyond Gucci
While Gucci remains central, ReconKering redistributes attention across its portfolio. Saint Laurent continues to expand internationally, with particular emphasis on Asian markets.
Bottega Veneta is extending its presence beyond its core categories, building a wider cultural resonance. Balenciaga maintains its hold on a younger audience, where expression and identity play a defining role. Alexander McQueen is undergoing a more pronounced transformation, pointing toward a renewed direction.
At the same time, categories such as jewellery, eyewear and beauty are becoming increasingly relevant within the group’s long-term plans. Jewellery is being developed with sustained growth in mind, eyewear is moving closer to technological innovation, and beauty is expanding into broader lifestyle territory.
Why China Remains Central to Luxury’s Future Despite Market Volatility
Geographic priorities are also becoming more defined. China occupies a central position, with investments that extend beyond retail into local partnerships and talent development.
This reflects a change in how growth is approached. Rather than a model where influence flowed outward from Europe, the emphasis is now on engaging with regional dynamics directly. Luxury becomes more responsive to different cultural contexts, adapting through interaction rather than standardisation.
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Luxury After Growth: A Structural Shift That Extends Beyond Kering
ReconKering does not present a finished outcome, nor could it. More plausibly, it marks a phase of transition in which the previous model has been set aside while the next is still taking shape.
The question is no longer whether luxury will continue to grow, but how—and at what pace. There is an inherent degree of uncertainty in that process: operational changes can be measured and adjusted, systems streamlined, and store networks reduced to optimise margins, yet the element of desirability remains far less predictable. Even so, the direction at Kering is clear enough. If the process holds, ReconKering may come to be seen as more than a corporate strategy—a moment at which luxury began to rely more consciously on structural discipline, alongside the creative and emotional forces that have always defined it.
Angelo Ruggeri
Journalist and Tutor for Styling, Business and Design Course and Master’s Programmes, Milan