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Kering, the owner of Gucci, is in exclusive talks with private equity firm Ardian to sell a majority stake in a prime Fifth Avenue property, as the French group tries to cut costs amid a slowdown in luxury demand.
The New York building — bought just over a year ago — could become the second deal of this type that the Paris-listed luxury group has struck with Ardian, according to people familiar with the matter, after it agreed a similar deal to sell stakes in prime Paris retail locations at the start of the year.
Kering has spent billions in recent years securing property in the most desirable retail spots in major capitals as part of a race between rival luxury groups to secure glitzy locations for their brands. The group, controlled by the Pinault family, bought 715-717 Fifth Avenue, near Rockefeller Center and St Patrick’s Cathedral, last January for just under $1bn.
However, the shopping spree came at a bad time for the group, which has struggled with slumping sales over the past year, particularly at flagship brand Gucci. Kering’s shares have fallen 43 per cent in the past year, giving the group a market value of €21bn.
Kering and Ardian both declined to comment. The talks between Kering and Ardian were first reported by Reuters.
The group, which also owns Saint Laurent and Balenciaga, spent €1.3bn to acquire a large block on Via Monte Napoleone in Milan from US private equity group Blackstone in 2024. At the time it was the largest European real estate deal for two years.
Kering told investors earlier this year that it was planning to continue selling stakes in some real estate assets in order to release capital while securing lease-back guarantees for its stores.
Retail locations in a limited number of rarefied neighbourhoods are essential for luxury brands, driving up property prices amid competition for space between corporate owners such as Kering, LVMH and Chanel. However, the deals also require large amounts of capital, at a time when Kering needs to invest heavily in reviving its top brands.
“Once a brand is making over €3bn in sales, these [kinds of locations] become indispensable,” Kering chief executive François-Henri Pinault told reporters last year. But “just because a building is available in a premium location, it doesn’t mean we’ll buy it. We will take it only if it makes sense.”
