Kering Looks to Offload Stake in Fifth Avenue Flagship Property Amid Cost-Cutting Drive

THE WHAT? Luxury conglomerate Kering, owner of Gucci, is in exclusive discussions with investment firm Ardian to sell a stake in its high-profile Fifth Avenue property in New York, acquired just over a year ago for nearly US$1 billion.

THE DETAILS Sources close to the matter revealed that Kering is negotiating with Ardian over a partial divestment of 715–717 Fifth Avenue, a 115,000-square-foot retail property acquired in January 2024 for US$963 million. The site was purchased to secure premium retail presence in one of the world’s most trafficked shopping corridors. The potential sale is part of Kering’s plan to monetise assets and manage the group’s surging net debt, which reached €10.5 billion (US$12 billion) at the end of 2024—up significantly from near-zero levels three years prior.

The real estate transaction would support Kering’s previously stated goal to raise €2 billion or more from asset sales within two years, amid sluggish consumer demand and ongoing luxury market recalibration.

THE WHY?  With the global luxury sector experiencing headwinds, Kering is looking to rebalance its financial position and optimise its asset base, especially following a series of high-value property investments in fashion capitals including New York, Milan and Paris. The potential divestment allows Kering to retain prime retail exposure while freeing up capital to reinvest in brand-building or operational efficiencies—critical as beauty and personal care arms within luxury portfolios face increased competition and shifting consumer behaviours.

Source: Reuters

The post Kering Looks to Offload Stake in Fifth Avenue Flagship Property Amid Cost-Cutting Drive appeared first on Global Cosmetics News.