Prada and Kering Are Betting Fewer Stores Sell More, Right as Looters Test That Theory

Luxury groups are consolidating. Prada CEO Andrea Guerra is pulling back from smaller Chinese and Italian cities, closing two or three secondary Italian locations in 2027 and 2028 while questioning why some second- and third-tier Chinese cities needed two or three stores at all; the money instead goes toward the newly expanded, eight-floor Prada Galleria in Milan, with similar projects reportedly planned for Miu Miu and Versace. Kering is further along, having cut its store count by 105 this year, including 25 at Gucci, and just raised its annual closure target from 100 to at least 125. Hermès, meanwhile, says its new London flagship is outperforming without cannibalizing its other stores in the city.

The strategy got an unplanned stress test this week when protests in France turned into opportunistic looting. Hermès's Marseille boutique was looted and, per CFO Eric du Halgouët, will not reopen anytime soon; the company has added security across its French stores. Private security guarded Dior's Avenue Montaigne flagship, and attackers failed to get into Louis Vuitton's Place Vendôme store, reportedly thanks to specialized windows. It echoes, without matching, the 2024 burglary at Chanel's New York flagship, where prosecutors say roughly $1.7 million in merchandise was taken.

Betting on fewer, bigger stores only pays off if those stores stay open and intact, and this week was a reminder that "flagship" can mean target as easily as showcase. Gucci's own-store sales fell 9 percent last quarter while its wholesale sales jumped 45 percent, prompting analysts to ask whether the brand is quietly pushing inventory out the back door while it talks up fewer, better doors out front.

Source: Glossy

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →