Kering's Credit Outlook Downgraded to Negative Amid 25% Gucci Sales Drop

Kering S.A., the parent company of luxury brand Gucci, has had its credit outlook downgraded from stable to negative by S&P Global. This decision comes as a result of declining sales for Gucci and other products under the Kering umbrella during the first half of the year.

The downgrade was announced in a report on Kering's investment-grade credit rating. Analysts highlighted that the French conglomerate's luxury apparel has seen weakening consumer demand in key markets, with revenue in the Asia-Pacific region and China dropping by 22% year-over-year, a significant decline.

Kering's performance has lagged behind competitors such as LVMH, Dior, and Hermes this year. Gucci, the flagship brand of Kering, contributed more than half of the company's core earnings (EBITDA) last year. However, its sales decreased by 25% in the first half of 2025.

Despite the downgrade, S&P maintained Kering's long-term issuer credit rating at BBB+, which is at the lower end of the high-grade rating spectrum. The negative outlook reflects the continued pressure on Kering's operating performance in a challenging industry environment. The company's transformation efforts face execution risks, which have reduced the rating's buffer.

In response to these challenges, Kering appointed a new CEO in June. The former CEO of Renault, a French automaker, will take over the role in mid-September. This leadership change is expected to bring fresh perspectives and strategies to address the current market challenges and drive the company's transformation efforts.