PARIS — As the race for prime Parisian real estate heats up, luxury giant Kering and private equity firm Ardian have signed a binding agreement to create a joint venture of prime real estate assets.
Kering will transfer three of its prestigious addresses to the new entity. The deal is valued at 837 million euros, with Ardian taking a 60 percent stake in the new entity. Kering will retain 40 percent. The transaction is expected to close in the first quarter of 2025.
The properties include Hôtel de Nocé on the north side of Place Vendôme where Kering’s jewelry brand Qeelin currently has a store. That address is across the square from where Kering is currently revamping an historical building for a new Gucci flagship as well.
Two luxury buildings on Avenue Montaigne are also included in the portfolio.
“We are very pleased with this partnership, which allows us to secure for the long-term, highly prominent retail locations while preserving our financial flexibility. With Ardian, a leading investment firm, we have found a quality partner with whom we share a French heritage and a common vision,” said Kering deputy chief executive officer and chief operating officer Jean-Marc Duplaix.
“We are proud to partner with Kering, a global leader in luxury, to invest in iconic, stabilized properties on the premier luxury streets of Paris,” added Ardian France head of real estate Stéphanie Bensimon.
The deal will give Kering a much-needed cash infusion.
It comes as Kering has implemented cost-cutting measures to right its balance sheet after facing consecutive quarters of declines amid a sharp drop in demand in China, and the floundering performance of its star brand Gucci.
Kering also owns Balenciaga, Bottega Veneta and Saint Laurent. It’s facing an expected 50 percent drop in operating profit for the fiscal year.
In the most recent round of results issued Oct. 23, the company indicated that all ideas were on the table.
“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,” Kering chairman and CEO François-Henri Pinault said at the time.
Kering will release its next round of results Feb. 11.
