Kering embarks on huge commercial development opposite Louis Vuitton near Paris’s place Vendôme
One of the few Parisian cafés on the uber-chic rue Saint-Honoré in Paris, the Castiglione, located at number 235 of the central Parisian artery, is closing down. The café, which was usually open seven days a week, was an institution for its regulars including businessmen and women, and fashion celebrities.
Besides the Casti, as the café was known, whose 175-square-metre premises were bought by real estate investment firm Compagnie Financière de Choiseul in 2021, the entire neighbourhood is undergoing a make-over. Other commercial premises in the area had been bought by the French investment firm, like the 52-square-metre Pierre Marcolini store at the same address, and notably, in 2020, the buildings at 12 and 14 rue de Castiglione, home to stores, offices and apartments and extending respectively over 2,367 and 5,362 square metres. A set of properties that feature in a huge real estate project being developed by Kering, laying down the gauntlet to Louis Vuitton’s Vendôme mega flagship store, located across the road on rue Saint-Honoré. The operation, first reported in spring 2022 by French magazine Lettre A, has been confirmed by several well-informed sources from the real estate sector.
According to one of them, Kering has paid approximately €300 million for the entire building at 235 rue Saint-Honoré, which consists of seven floors, including the mezzanine, and extends to rue de Castiglione, the street that leads to place Vendôme. “It may seem like a lot of money, but it's the going price for prime Parisian commercial real estate,” said the same source to FashionNetwork.com.
One source said that Kering initially agreed to rent the building from its former owners, at a market price of €12 million per year. However, after thinking it over, Kering decided to purchase the building, an option that seemed feasible given the group's considerable cash reserves. As part of this operation, the French luxury group has also bought the Castiglione. “[Kering] paid the café several million euro to cease trading, so the café’s owner will leave with a nice retirement plan,” said the source.
On rue de Castiglione, renovation work has been under way for some months. The Annick Goutal, Ladurée and Espace Castiglione stores, and the Carré des Feuillants restaurant, are all closed. Hoardings have been put up over several dozens of metres, shutting off the rue de Castiglione arcades.
According to various sources, Kering is planning to open a new 2,000 square-metre-plus flagship store for Gucci, its leading label. In a report on commercial projects currently planned in Paris, real estate developer Knight Franck has indicated that the store would extend over 2,350 square metres on two floors. Recently, at Milan Fashion Week, FashionNetwork.com queried Gucci’s CEO Marco Bizzarri about the project, but he said he knew nothing about it. As for Kering, it has declined to comment. Gucci’s prospective new store would sit literally opposite the Parisian flagship of Louis Vuitton, Gucci’s LVMH-owned arch-rival. It is unclear what Kering intends to do with the building’s upper floors.
According to the building permit filed with the Paris city authorities, the development relates to the premises on 235-235 bis rue Saint-Honoré and 12-14 bis rue de Castiglione, for a total of nearly 8,000 square metres, and has been commissioned to architecture studio Franklin Azzi. “The work involved is substantial,” said one source. “Large parts of the site require a major overhaul but, as the building's owner, [Kering] is in a position to do it. Luxury groups have the kind of resources that make a project like this possible,” they added.
It is hard to envisage when such large-scale renovation work will finish. One remaining question is, if Gucci’s new project has indeed been approved by Kering, what about the label’s current Royale flagship in Paris, at 2 rue du Faubourg Saint-Honoré? The game of Monopoly luxury giants are playing in Paris seems to be far from over.
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