ship, refining store networks, and preparing a new slate of product launches, the group remains weighed down by brand fatigue, market headwinds in Asia and the US, and internal uncertainty about how to restore relevance at scale. “Though the numbers we are reporting remain well below our potential, we are certain that our comprehensive efforts of the past two years have set healthy foundations for the next stages in Kering’s development,” François-Henri Pinault, chairman and CEO, said in a statement.  Revenue falls across the board  Kering reported group revenue of €7.6 billion for the first half of this year, down 15 per cent on a comparable basis. Net income fell to €474 million, while recurring operating income declined to €969 million, with margins compressed across nearly all divisions. Only Bottega Veneta and the group’s eyewear and beauty segment posted positive top-line growth. Gucci, which has historically accounted for nearly half of group revenue, was the weakest performer. Its sales dropped 25 per cent year-on-year to €3.0 billion during the first half. In the second quarter alone, Gucci’s wholesale revenue fell by 50 per cent, and even its directly operated retail sales were down 23 per cent.  Although the new Giglio handbag, unveiled in the Cruise 2026 collection, reportedly performed well, it is far too early to judge whether isolated product wins can revive momentum at a brand struggling with broader issues of desirability and identity. At Yves Saint Laurent, revenue declined 11 per cent in the first half to €1.3 billion. While ready-to-wear and footwear collections were well received, the brand still posted a 10 per cent drop in sales from directly operated stores and a 17 per cent drop in wholesale revenue.  Even Balenciaga and Alexander McQueen failed to buck the trend. The “Other Houses” segment declined 14 per cent, with McQueen undergoing store closures and restructuring, and Balenciaga’s sales remaining weak in Europe and Japan. That division posted a €29 million operating loss for the half-year. China, the US and the geography of demand Kering’s underperformance is partly explained by geography. Asia Pacific and Japan are both in slowdown mode. In the second quarter, revenue fell 19 per cent in Asia-Pacific and 29 per cent in Japan, largely due to the ongoing absence of high-spending tourists and broader weakness in Chinese consumer sentiment. In North America, where luxury demand remains subdued amid inflation and political uncertainty, Kering saw sales fall 10 per cent. While this represented a slight improvement from the first quarter, it still marked a double-digit decline in what was once a growth market for brands like Gucci and Saint Laurent. Western Europe, too, decelerated, posting a 17 per cent drop in the quarter, with tourism failing to offset domestic softness.  Leadership shuffle and creative handoffs The group recently announced the appointment of Luca de Meo, known for turning around legacy businesses in the automotive sector, as its new CEO. What de Meo lacks in fashion experience, he may compensate for in brand architecture and disciplined management.  When de Meo joined Renault in 2020, the company was reporting losses of more than €8 billion. Within 18 months, he had helped restore profitability by cutting production capacity, reducing global headcount and narrowing Renault’s focus. At the same time, he doubled down on hybrid and electric vehicle development, preparing the company for a post-combustion engine future. These credentials are likely what made him attractive to Kering’s board. The creative reboot, however, will take longer. Gucci’s new artistic director, Demna Gvasalia, is expected to debut his first major collection in September, with full rollout slated for early 2026. This leaves a significant gap in brand momentum. In the absence of visible creative renewal, Kering remains reliant on cost-cutting and portfolio management to support earnings.  Meanwhile, Saint Laurent and Balenciaga have retained their creative leadership but are still struggling to generate consumer excitement. Bottega Veneta, by contrast, has benefitted from stability and gradual brand building under Matthieu Blazy, whose restrained design language has resonated in the US. The brand grew revenue 2 per cent in the first half and posted a modest improvement in operating margin. Further reading: Why Kering is betting on an auto industry leader to steer its luxury empire.