Kering Just Shelled Out Nearly $1 Billion for a Giant N.Y.C. Building
Kering is making big moves in the Big Apple.
The French luxury giant, which is the parent company of houses such as Gucci, Brioni, and Balenciaga, announced on Monday that it bought a new building in New York City for $963 million. Located on ritzy Fifth Avenue by the southeast corner of 56th Street, the site spans some 115,000 square feet and includes several multi-level retail spaces.
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“This investment represents a further step in Kering’s selective real estate strategy, aimed at highly desirable locations for its houses,” the conglomerate said statement.
Fifth Avenue and Madison Avenue have been recently gaining more luxury boutiques after dealing with a retail exodus over the past few years. Around one in 10 storefronts in Manhattan were empty in 2019, according to data gathered by the city council. The pandemic further exacerbated things, leading to record vacancy rates in some neighborhoods. Fortunately, the two streets are in the midst of a revival thanks to more reasonable rents, the influx of tourists, and a renewed interest in shopping brick-and-mortar. Louis Vuitton, Sotheby’s, and Chanel are just some of the major luxury players opening new locations in the area. In addition, Prada recently purchased a building on Fifth Avenue for $425 million. The Italian house had been leasing the five-story location since 1997, but decided to buy it due to its “high strategic value.”
Kering didn’t share which brands under its umbrella would be popping up in the new Fifth Avenue spot. Brioni, Pomellato, Balenciaga, and Ginori 1735 currently don’t have standalone retail spaces on Fifth, so are perhaps the ideal candidates.
In addition to the new Manhattan location, Kering recently snapped up prime properties on Avenue Montaigne and Rue de Castiglione in Paris. It also has landmark assets in Tokyo’s swanky Omotesando neighborhood and France’s flashy H?tel de Nocé. Hopefully, the new acquisitions will help Kering get back in the black. The group’s revenue was $4.9 billion (€4.5 billion) in the third quarter of 2023, down 13 percent from $5.6 billion (€5.14 billion) in 2022. Well, they do say you have to spend money to make money.
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