Amid tariffs, the mounting cost-of-living crisis, and consumers’ growing ambivalence toward legacy high-end labels, luxury had an especially rough year in 2025. Few brands felt that pressure more acutely than Gucci. According to the recently released Q4 fiscal report from French multinational luxury goods conglomerate Kering, sales at the Italian luxury house fell 10 per cent year-on-year in the fourth quarter, weighing on group revenues. Once the engine room of Kering’s growth, Gucci has st
struggled to excite consumers in a softer global luxury market.
The brand’s slowdown was a key driver behind Kering’s broader challenges. The luxury group – which owns Gucci, Saint Laurent, Bottega Veneta, Balenciaga, McQueen and Brioni – reported that overall revenues in the three months to December 31 fell nine per cent at reported exchange rates to €3.91 billion (approximately $4.64 million), representing a three per cent decline in comparable terms.
For the full year, Kering’s revenue reached €14.7 billion (approximately $17.5 billion), down 10 per cent on a comparable basis.
In an earnings call, CEO Luca de Meo, who was appointed to the role in September 2025, acknowledged the scale of the challenge. “Of course, 2025 was not the year we wanted. I think it didn’t reflect the full potential of Kering, and we all know it here. But what matters is our response: swift, disciplined and unwavering… This revenue level reflects the low point of the cycle and the starting point of our rebound.”
While the numbers were disappointing, they showed a marked improvement from Q3, when group revenue fell 10 per cent at reported exchange rates and six per cent on an underlying basis.
De Meo added, “We will see growth in 2026, we will see increasing margins on all the brands. With sales trends improving quarter after quarter, the momentum is real, early, fragile, but real. I guarantee you that we will build on it.”
Gucci’s identity crisis?
“This has not been a good year for Kering,” remarked Neil Saunders, analyst and managing director at GlobalData, pointing in particular to Gucci’s recent performance.
While the luxury market has been overall soft in 2025, Saunders argues that many of Gucci’s problems stem from its failure to excite consumers. He noted that the brand’s recent collections have not resonated and that, overall, the label has lost much of its ‘oomph’.
That said, Saunders observed there appears to be a roadmap for rebuilding Gucci, and Kering’s Q4 numbers suggest conditions may be stabilising.
Part of that roadmap has involved group-level restructuring designed to give brands such as Gucci more breathing room. In 2025, De Meo took several steps to reduce costs, including selling the group’s beauty division to L’Oréal for €4 billion ($4.66 billion) and delaying an agreement to buy the rest of Valentino by two years. Overall, the former Renault executive’s cost-cutting measures have saved the company €925 million ($1.1 billion), reducing group operating expenses by nine per cent year-on-year.
Additionally, De Meo streamlined Kering’s portfolio by selling key real estate assets, reducing net debt to €8.04 billion ($9.6 billion) in 2025 from €10.5 billion ($12.5 billion) in 2024.
As for next steps, De Meo is expected to present his full strategic plan at a capital markets day in April.
Reclaiming relevance
Similar to Saunders, CI&T’s global director of retail strategy, Melissa Minkow, noted that part of Gucci’s struggle stems from broader headwinds facing high-end retail brands.
“In general, luxury is a tough space, especially given that the majority of consumers we survey tell us they’re trying to pull back on spend,” said Minkow.
However, she suggested Gucci could look to more successful turnaround stories within the sector for inspiration. Burberry, for instance, has seen progress by being more disciplined with its assortment and ensuring it aligns closely with what its target customer wants.
Additionally, Burberry has narrowed its price architecture to the range shoppers are willing to pay, striking a balance between preserving elevated brand status and not alienating aspirational customers.
“Assortment and price are always the levers I turn to first when a turnaround is needed, not to mention paying closer attention to marketing, which Gucci has been pretty quiet on,” Minkow added.
If Gucci is to regain momentum, it may need to dig deep into the qualities that once made it a powerhouse: timeless, high-quality products rooted in Italian craftsmanship, paired with a refreshed sense of storytelling that can resonate with both new and returning consumers alike.
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