Gucci owner Kering purchases “prestigious” Fifth Avenue luxury retail space in New York City for US$963M
23 Jan 2024 --- Gucci owner Kering will soon set up shop on New York City’s “iconic” Fifth Avenue after purchasing about 115,000 sq ft of “multi-level luxury retail space” for US$963 million.
The property, located at 715–717 Fifth Ave, is across from the Trump Tower in Manhattan.
According to a Kering statement, this latest move is part of the company’s selective real estate strategy:
“With this transaction, Kering acquires exceptional retail locations on one of the world’s most iconic avenues. This investment…is aimed at securing key highly desirable locations for [our] Houses. In addition to recently acquired prime properties on avenue Montaigne and rue de Castiglione in Paris, the Group’s portfolio includes landmark assets in Tokyo’s Omotesando, and the Hôtel de Nocé housing Boucheron’s Paris flagship. In line with its longstanding financial strategy, Kering intends to execute a disciplined and flexible approach with regards to the management of its real estate portfolio,” according to a company statement.
New York still solid with big brands
Last month, Italian fashion house Prada paid US$425 million for 724 Fifth Avenue, where its store is located. Before the purchase, Prada said it leased the building for more than two decades.
Cushman & Wakefield’s “33rd edition of Main Streets Across the World” examined retail rental rates in prime locations globally.
Kering acquired centuries-old luxury cologne maker Creed for a reported €3.5 billion (∼US$3.8 billion).
According to the global commercial real estate services firm, “New York’s Fifth Avenue retains its top ranking as the world’s most expensive retail destination, despite recording flat rental growth year-over-year.”
World wide expansion
In addition to Gucci, global luxury group Kering owns a stable of renowned brands ranging from Saint Laurent, Bottega Veneta, and Balenciaga to Alexander McQueen, Brioni and Kering Beauté.
Per the company’s statement, it seems Kering has been busy buying other prime pieces of retail real estate, most notably in Paris last year with top-level retail locations on high-end shopping streets, avenue Montaigne and rue St. Honore (which wraps around the Paris corner to include 12-14 rue Castiglione).
Kering reportedly tried to offload the Paris properties soon after the acquisition, but the plan was canceled or postponed after the company apparently could not find a buyer. Personal Care Insights reached out to Kering for further information.
Kering’s Creed acquisition
Last year, Kering bought the centuries-old luxury cologne maker Creed for a reported €3.5 billion (∼US$3.8 billion).
At the time, it stated:
“The high-end luxury fragrance segment benefits from strong market dynamics fueling double-digit growth, high profitability, and significant revenue recurrence driving long-term resilience through the cycle. The beauty category is a natural extension of Kering’s luxury universe, and the Group is confident its expansion in this strategic segment will create lasting value for the Group and its Houses.”
Read more about Kering and other acquisitions as part of a special report by Personal Care Insights focusing on fragrance trends amid record-breaking sales last year.
By Anita Sharma
