Unlock Editor’s Digest Lock for Free
FT editor Roula Khalaf will select your favorite stories in this weekly newsletter.
Kering, the owner of Gucci, sells to sell the majority of shares in the Fifth Avenue property in exclusive consultations with private equity firm Ardian as the French group seeks to cut costs amid a slowdown in luxury demand.
A New York building purchased over a year ago could be the second trade of this type. This type of group hits Ardian after agreeing to a similar agreement to sell stocks at retailers in Paris, according to people familiar with the issue.
Kering has spent billions of dollars in recent years securing fortunes at the most desirable retail spots of key capital as part of a race between rival luxury groups to secure a flashy spot for the brand. The group, managed by the Pineau family, purchased 715-717 Fifth Avenue, located near Rockefeller Center and St. Patrick’s Cathedral for just under $1 billion last January.
However, shopping has come at a bad time for the group. This is especially flagship brand Gucci, which has struggled with poor sales over the past year. Kering’s shares have fallen 43% over the past year, giving the group a market value of 21 billion euros.
Kering and Ardian both declined to comment. Consultations between Kering and Ardian were first reported by Reuters.
The group, also owned by St. Laurent and Balenciaga, spent 1.3 billion euros in 2024 to acquire a large block via Montenapoleon in Milan from the US private equity group Blackstone.
Kering told investors earlier this year that it plans to continue selling shares in some real estate assets to release capital while securing leaseback guarantees for the store.
A limited number of rare local retailers are essential for luxury brands and raises real estate prices amidst competition for space between corporate owners such as Kering, LVMH and Chanel. However, the deal also requires a large amount of capital when Kering needs to invest heavily in reviving top brands.
“If a brand makes more than 3 billion euros in sales, these (types of locations) become essential,” Kering CEO François Henri Pineau told reporters last year. But “just because a building is available at a premium location doesn’t mean you’re buying it. You’ll only take it if that makes sense.”
