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Kering’s Luxury Push Could End Stella McCartney Partnership

Kering and Stella McCartney could be parting ways.

An unnamed source with insight into the companies has said the luxury group is considering selling its 50 percent stake back to the fashion house, according to the Financial Times.

Kering, which entered into a joint venture with the McCartney brand in 2001, is actively looking to restructure its business. The group’s new strategy is to focus on luxury and those labels that are able to scale like its Gucci, Saint Laurent and Bottega Veneta businesses. Kering has already announced plans to distribute 70 percent of Puma shares to shareholders. Once the transaction is complete, the company will have a 16 percent in the athletic company.

In a statement, the company said, “the contemplated project would enable Kering to reinforce its status as a leading pure player in luxury with an enhanced, best-in-class profitability.”

[Read more about Kering’s plans for Puma: Kering to Distribute Puma Stake to Its Shareholders]

Regarding the potential Stella McCartney sale, the two firms have only indicated that if this transaction or any other were to take place, there would be a public announcement.

“The Stella McCartney brand is deeply rooted in ready to wear and athleisure,” John Guy, head of luxury goods at brokerage Mainfirst, told the publication. “Kering has realized that it’s hard to leverage the heritage of Stella McCartney in other categories like leather goods in the same way it can with brands like Balenciaga or Alexander McQueen.”

The two companies share a dedication to ethical fashion. The Stella McCartney brand has always abstained from using animal products, and Kering was recently named the most sustainable luxury company in the Corporate Knights’ Global 100 Index.

Kering is riding high on luxury. The firm reported a 23 percent increase in revenue in the third quarter, ended Sept. 30. The surge was led by the luxury group in general and a 49 percent spike for Gucci specifically.