LVMH’s silent enemy is selling a piece of Fifth Avenue that he bought a year ago for almost a billion dollars

As Kering – owner of Gucci, Saint Laurent, Bottega Veneta and Balenciaga – begins to sell off its most prized properties, it is a sign that the luxury industry is in a real crisis. The French giant is working with investment firm Ardian to sell a stake in a prestigious building on New York’s Fifth Avenue that it bought just a year ago for $963 million.

What is happening at the Kering group is very worrying for analysts and investors.

- This is not a simple portfolio reorganization. It is a desperate attempt to save the group's financial situation - experts say.

What exactly is happening at Kering? The group's shares have fallen 60 percent in two years, and after being dropped from the Euro Stoxx 50 ranking —a list of the fifty most important European companies— Kering is having to act fast. The next move? Luxury real estate. Industry media have just reported that François-Henri Pinault's group is planning to sell its most prestigious property in New York.

According to Reuters, the Kering group is also in exclusive talks with the Ardian fund regarding the sale of a stake in a luxury property on New York's Fifth Avenue. The building, purchased by the French in January 2024 for $963 million, has over 10,000 square meters and houses several boutiques in one of the world's most expensive retail locations.

The move is another step in the group’s strategy to reduce debt and boost liquidity amid falling global demand for luxury goods. The group’s net debt rose to €10.5 billion at the end of 2024 , from almost zero just three years earlier, thanks in part to real estate investments in New York, Milan and Paris.

Jean-Marc Duplaix, Kering’s deputy CEO, is hoping to recoup €2 billion in the next two years by selling prestigious addresses. The list also includes properties in Tokyo, Paris and Milan on Via Montenapoleone – a street that was the world’s most expensive retail artery in 2024.

Meanwhile, smaller but more efficiently managed conglomerates such as Prada Group show that even in times of crisis it is possible to efficiently manage a business.

While Kering is selling off assets, Prada is quietly taking over Versace and investing in artisan companies like Rino Mastrotto Group. This shows that in luxury, it's not enough to have the best brands - you also have to know how to manage them. Kering now has a chance to learn this, but the lesson will be expensive.