Kering 2026: The Demna Gamble and What It Tells Us About the Future of Luxury.
In February 2025, Kering fired Sabato De Sarno after less than two years as Gucci's creative director. In July, they replaced him with Demna Gvasalia the Georgian designer who built Balenciaga into the most culturally dominant luxury brand of the 2020s, and who also presided over one of the most damaging controversies in recent luxury history.
That is the bet. A group with 14.67 billion euros in revenue, down 13% in a single year, with its flagship brand down 22%, placing its future on the most polarising creative figure in fashion.
Whether that bet pays off will define the luxury landscape for the next five years.
What Actually Happened to Kering
The numbers require context before judgment.
Kering's 2025 revenue of 14.67 billion euros represented a 13% decline on a reported basis. Gucci, which contributes approximately 40% of group revenue, fell 22% to 5.99 billion euros. Retail sales at Gucci declined 18%. Wholesale collapsed by 34% on a comparable basis. The stock fell 26% across 2025, dramatically underperforming the CAC 40.
This is not a story of a brand damaged by external events. The luxury market was under pressure in 2025 the Chinese consumer remained cautious, macroeconomic conditions tightened across European and American markets but Kering's decline was structural, not cyclical. LVMH declined. Kering collapsed. The difference is the quality of the portfolio and the coherence of the brands within it.
Three Mistakes in Four Years
Understanding Kering's position requires understanding the sequence of decisions that created it.
Alessandro Michele's decade at Gucci built the brand into a cultural phenomenon. His maximalist vision eclectic references, gender fluidity, romantic excess turned Gucci into the defining luxury brand for a generation that grew up with Instagram. Revenue tripled from 2015 to 2021. Michele's departure in November 2022 was presented as a creative evolution. In retrospect, it was the beginning of an identity crisis.
Sabato De Sarno, appointed in January 2023, brought a quieter aesthetic Ancora Red as a signature colour, restrained tailoring, a deliberate move away from Michele's eclecticism toward something more aligned with the contemporary quiet luxury moment. The problem was not De Sarno's talent. The problem was timing and positioning. The quiet luxury consumer was already served by Bottega Veneta, Loro Piana, and The Row. Gucci had abandoned its territory without claiming a new one.
De Sarno was dismissed in February 2025 after less than two years. Gucci had changed its creative identity twice in three years.
Demna: The Logic Behind the Gamble
Demna Gvasalia was announced as Gucci's new artistic director in February 2025, with his first full collection shown at Milan Fashion Week in September 2025.
The appointment was, by any measure, a high-risk move. Demna's Balenciaga tenure produced work of genuine cultural significance the Triple S sneaker, the political references, the collaborations with Adidas and The Simpsons but also the 2022 advertising controversy that triggered a brand crisis significant enough to require a public apology from Demna himself.
The logic behind the appointment, however, is coherent.
Demna understands the architecture of cultural authority. He knows how to make a brand the reference point of a conversation rather than a participant in one. At Balenciaga, he did not follow fashion he created the frames through which fashion was discussed. That ability to set the terms of the cultural debate is exactly what Gucci lost when it lost Michele.
His first Gucci collection, the Spring 2026 ready-to-wear presented as "La Famiglia", showed a designer reconnecting a house to its roots in travel, craftsmanship, and Italian identity. Horsebit, Bamboo, GG monogram Gucci's codes reassembled with a new logic. The critical reception was cautiously positive. The commercial reception will be determined by September 2026, when the Fall 2026 collection reaches retail.
The FW 2026 Milan Show
At Milan Fashion Week, Demna's second Gucci collection for Fall/Winter 2026 confirmed the direction. Structured silhouettes, controlled references to the house archive, a visual language that is legible without being obvious.
What it demonstrated was discipline. Demna at Gucci is not Demna at Balenciaga. The register is different less provocation, more seduction. Whether that restraint is genuine or strategic remains to be seen. But the early signal is that Demna understands the assignment: he is not rebuilding Balenciaga. He is rebuilding Gucci.
Luca de Meo and the Business Rebuild
The creative question is only half of the Kering story. The other half is structural, and it falls to new CEO Luca de Meo appointed in 2025, previously CEO of Renault to resolve it.
De Meo has moved quickly. Kering sold its beauty division to L'Oreal for 4 billion euros, reducing complexity and generating cash. The group closed more than 200 stores globally to reduce the cost base and protect brand exclusivity. Net debt fell from 10.5 billion euros in 2024 to 8.04 billion in 2025. Operating expenses were reduced by 9%.
His stated goal: return to revenue growth in 2026, improve margins across all brands, and present a longer-term transformation strategy at Kering's Capital Markets Day on April 16, 2026.
That date matters. April 16 is when Kering will either confirm that the turnaround is real or reveal that the recovery is fragile. Every luxury investor, analyst, and editorial director with a serious interest in the market should be watching.
What de Meo Brings That Kering Needed
Luca de Meo is not a fashion executive. He is an industrial CEO — Renault, Volkswagen Group, SEAT who built brands under structural constraint and competitive pressure.
That background may be exactly what Kering needs. The group's problem for the past three years has not been creativity. Gucci's creative directions were defensible. The problem was execution: the speed of transition, the management of wholesale, the overextension of the retail network, the underinvestment in brand-building above the product level.
De Meo's language is already different from his predecessors at Kering. He talks about "upper funnel brand work" — the marketing investment that builds long-term desirability rather than short-term conversion. That is not the language of a fashion CEO managing collections season by season. It is the language of a brand builder thinking across five-year cycles.
Kering vs LVMH: The Strategic Gap
The Kering story cannot be told without reference to LVMH, and the contrast is instructive.
LVMH also declined in 2025. Revenue softened, the Chinese market contracted, Stella McCartney underperformed. But LVMH's decline was managed from a position of portfolio strength that Kering does not have.
LVMH owns 75 maisons. If Gucci is Kering's equivalent asset, it is a single brand that represents 40% of group revenue. When Gucci underperforms, Kering underperforms. There is no Louis Vuitton to absorb the shock, no Moet Hennessy to provide liquidity, no Sephora to generate retail cash flow.
This structural vulnerability is Kering's deepest problem, and it is not one that Demna or de Meo can resolve in a single year. The solution building Saint Laurent, Bottega Veneta, and Balenciaga into genuine counterweights to Gucci is a five to ten year project.
Saint Laurent under Anthony Vaccarello is the most advanced of these alternatives. Paris Fashion Week FW 2026 confirmed that Vaccarello's Saint Laurent has the brand coherence to support significant premium pricing. But it remains a substantially smaller business than Gucci.
What the Market Is Pricing In
Following the February 2026 earnings release which showed Q4 2025 results that beat lowered expectations Kering's stock rose 12% in a single session. That reaction reflects a market that had priced in significant pessimism. The earnings beat was not a sign of recovery. It was a sign that the decline had been less catastrophic than feared. There is a difference.
For the serious investor, the Kering question in 2026 is whether the April 16 Capital Markets Day produces a credible long-term plan. If de Meo presents a specific, measurable framework for rebuilding Gucci's brand equity and diversifying the group's revenue base, the stock has meaningful upside from current levels. If the plan is vague "return to growth" without specifics the 12% post-earnings rally will prove premature.
Frequently Asked Questions
Why did Kering's revenue fall so sharply in 2025?
Kering's 13% revenue decline in 2025 was driven primarily by Gucci, which fell 22%. The causes were structural: two creative director changes in three years created brand identity confusion, the wholesale channel collapsed as retailers reduced Gucci exposure, and the group underinvested in the upper-funnel brand marketing that sustains luxury desirability. The macroeconomic environment particularly a cautious Chinese luxury consumer amplified existing strategic weaknesses.
Who is Demna and why did Kering hire him for Gucci?
Demna Gvasalia is the Georgian-born designer who led Balenciaga from 2015 to 2025, transforming it into one of the most culturally dominant luxury brands of the decade. Kering hired him for Gucci because his ability to generate cultural authority to make a brand the centre of a conversation rather than a participant in it is precisely the capacity that Gucci lost after Alessandro Michele's departure. His first Gucci collection showed in Milan in September 2025.
Is Kering stock a good investment in 2026?
Kering stock recovered 12% on its February 2026 earnings release after beating lowered expectations. The investment case depends on the April 16, 2026 Capital Markets Day: if new CEO Luca de Meo presents a credible multi-year plan for rebuilding Gucci's brand equity and reducing the group's dependence on a single brand, the current price may represent genuine value. The risk is that the turnaround takes longer than the market anticipates.
How does Kering compare to LVMH in 2026?
The structural gap between Kering and LVMH is the central story of luxury business in 2026. LVMH's portfolio of 75 maisons means no single brand failure is catastrophic. Kering's dependence on Gucci approximately 40% of group revenue means one brand's underperformance affects the entire group. This concentration risk will not be resolved quickly, and it is the primary reason LVMH trades at a premium multiple to Kering.
What should we from Gucci in 2026?
Demna's first two collections Spring 2026 and Fall 2026 have shown a designer reconnecting Gucci to its Italian craft heritage with a more controlled, disciplined aesthetic than either Michele's maximalism or De Sarno's quiet restraint. The commercial test comes in September 2026 when Fall 2026 product reaches retail. That season's sell-through data will determine whether Demna's Gucci has found its customer.
Sources
CNBC: Kering Q4 2025 Earnings and CEO Revival Plan — cnbc
Business of Fashion: Kering Sales Fall for Third Year — businessoffashion
WWD: Inside Demna's Vision for Gucci — wwd
The Industry Fashion: Kering Double-Digit Revenue Decline — theindustry
TheStreet: Kering to Close 200 Stores After Sales Drop — thestreet
Ideal Investisseur: Kering Stock Analysis 2026 — ideal-investisseur
Numero: Demna Gucci FW 2026 Debut Show Analysis — weshmind
