As Kering focuses on its core luxury brands — including Gucci, Saint Laurent, Bottega Veneta — the company is handing off some of its landlord duties to an American expert.
Simon Property Group bought 100 percent of Kering’s The Mall Luxury Outlets, which it established in 2001. The Mall operates two outlet centers in Italy — one near Florence in Leccio and another on the Italian riviera in Sanremo.
The deal nets Kering proceeds of about 350 million euros.
According to a statement released by both parties: “Kering’s brands will maintain a presence in these two very high-end shopping villages, the strategy implemented by Kering aiming at gradually concentrating its outlet distribution to a limited number of exclusive venues.”
Balenciaga boutique in The Mall Outlet near Sanremo.
Hans Lucas/AFP via Getty Images
Kering, which will report on its fourth-quarter results next month, has been tightening its belt and cutting costs, partially as its Gucci brand has struggled to find its footing and saw organic sales drop 25 percent in the third quarter.
In October, François-Henri Pinault, chairman and chief executive officer of Kering, said, “Our absolute priority is to build the conditions for a return to sound, sustainable growth, while further tightening control over our costs and the selectivity of our investments.”
Simon is one of the world’s largest luxury mall operators and is expected to step in without interruption to The Mall’s operations.
This is Simon’s second big outlet move this week.
The real estate firm said on Wednesday that it agreed to purchase a large site in Thompson’s Station, Tenn., to develop a “luxury shopping and lifestyle destination” known as Nashville Premium Outlets.
Simon expects to break ground on the 325,000-square-foot, mixed-use center next year with plans for roughly 75 “best-in-class” retailers, restaurants and a hotel.
This is all familiar territory for Simon, which operates the mammoth Woodbury Common Premium Outlets in upstate New York, housing Gucci, Prada, Loro Piana, Saint Laurent, Brunello Cucinelli and many others.
