Kering Sells The Mall Luxury Outlets to Simon Property Group
In a strategic move to concentrate on its core luxury brands, Kering has decided to transfer some of its landlord responsibilities to an American heavyweight in the real estate sector. Kering, known for luxury giants such as Gucci, Saint Laurent, and Bottega Veneta, announced the sale of The Mall Luxury Outlets to Simon Property Group.
Simon Property Group, a leading name in luxury mall operations, has acquired 100 percent of The Mall Luxury Outlets, a venture Kering established back in 2001. The Mall comprises two prominent outlet centers located in Italy – one near Florence in Leccio and the other along the Italian Riviera in Sanremo.
The transaction resulted in Kering gaining proceeds of approximately 350 million euros, a substantial financial influx for the company. A joint statement from both Kering and Simon Property Group clarified, “Kering’s brands will maintain a presence at these two prestigious shopping villages, aligning with Kering’s strategy of gradually concentrating its outlet distribution to a select number of exclusive venues.”
This divestiture is part of Kering’s broader strategy as it approaches its fourth-quarter financial reporting next month. The company has been diligently working on cost management, particularly as it navigates challenges with its Gucci brand, which saw a notable decline in organic sales by 25 percent during the third quarter.
In October, François-Henri Pinault, Chairman and CEO of Kering, emphasized the company’s priorities: “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 Property Group is anticipated to seamlessly integrate into The Mall’s operations, ensuring no disruption occurs. This acquisition marks Simon’s second significant outlet move in a short span, highlighting its ongoing expansion and investment strategy.
Earlier this week, Simon Property Group announced plans to develop a “luxury shopping and lifestyle destination” named Nashville Premium Outlets. This project will be located in Thompson’s Station, Tennessee, and represents Simon’s intent to enhance its portfolio of premium retail experiences.
With plans to initiate construction on the 325,000-square-foot mixed-use center next year, this upcoming site will feature approximately 75 top-tier retailers, alongside restaurants and a hotel. Simon’s experience with major outlets such as the iconic Woodbury Common Premium Outlets in upstate New York, which houses luxury names like Prada, Loro Piana, Saint Laurent, and Brunello Cucinelli, positions them as a formidable player in the luxury retail market.
Overall, this acquisition affirms Simon Property Group’s commitment to expanding and enhancing its luxury shopping venue offerings, and it represents a pivotal step for Kering as it sharpens its focus on strengthening its luxury brand portfolio while optimizing its asset management strategy.
