Discussion: The State of Kering

[LadyJunon]

Kering the owner of Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Ginori 1735 as well as Kering Eyewear and Kering Beauté. Its parent company, Artémis, owns shares in Courrèges, Puma and Giambattista Valli.

In the past five years, Kering has faced numerous hardships concerning brand performance, company leadership and corporate structure with this past year being the most turbulent for the company. Below is a list of Kering's major creative director and executive changes:
2018
• Kering sells its shares of the Christopher Kane and Stella McCartney brands.
• Tomas Maier leaves Bottega Veneta after 17 years with his eponymous label also being shut down. His replacement is Daniel Lee.
• Patrick Pruniaux becomes the CEO of Kering's watchmaking houses, Girard-Perregaux and Ulysse Nardin.
• Kering has a shift in the board of directors with Héloïse Temple-Boyer replacing Patricia Barbizet as Deputy Chairman and Ginerva Elkann replacing Laurence Boone as Chief Economist.
• Artémis, Kering's parent company, acquires Courrèges, a few weeks before Yolanda Zobel's debut show. They've also acquired a minority share in Giambattista Valli, the year prior.
2019
• Bartolomeo Rongone replaces Claus-Dietrich Lahrs as CEO of Bottega Veneta.
• Kering appoints Cédric Charbit, CEO of Balenciaga, as part of Kering's Executive Committee.
2020
• Adrien de Maïa replaces Christina Ahlers as CEO of Courrèges.
• Nicolas Di Felice replaces Zobel as Creative Director of Courrèges.
• Charlotte Werner becomes the first CEO of Giambattista Valli.
• Kering sells back its shares of the Altuzarra label.
• Saint Laurent drops from the official show schedule, opting to show collections through film. The rest of the company follows suit.
• Jean Liu, Tidjane Thiam and Emma Watson join the Board of Directors.
2021
• Kering approaches Richemont for a merger, but is rejected.
• Kering transfers its shares of Puma to Artémis to refocus Kering on luxury.
• Ginevra Elkann leaves the Board of Directors.
• Kering acquires Lindberg.
• Artémis, Kering's parent company, acquires a majority stake in Giambattista Valli.
• Matthieu Blazy replaces Daniel Lee as Creative Director of Bottega Veneta.
2022
• Kering approaches Richemont once more for a merger, but is rejected again.
• Kering sells its stakes in Girard-Perregaux and Ulysse Nardin.
• Gianfilippo Testa replaces Emmanuel Gintzburger as CEO of Alexander McQueen.
• Alessandro Michele leaves Gucci after almost eight years as Creative Director, due to slowing sales.
• Balenciaga comes under fire for an inappropriate advertising campaign featuring a child holding a stuffed bear wear BDSM gear. The house has yet to fully recover from the scandal in the Anglosphere.
2023
• Sabato de Sarno is announced as Gucci's Creative Director. He is slated to show his debut Spring 2024 collection this coming September.
• Bluebell, an activist investment company, acquires a stake in Kering, prompting a management shift.
• Marco Bizzari is stepping down from his CEO position at Gucci with Jean-François Palus, Deputy CEO of Kering, will act as a temporary CEO of Gucci.
• Francesca Belletini, Saint Laurent's CEO, will gradually become Kering's Deputy CEO with Saint Laurent receiving new management.
• Raffaella Cornaggia becomes CEO of Kering Beauté.
• Armelle Poulou becomes CFO of Kering.
• Maureen Chiquet joins the Board of Directors.
• Kering acquires 30% of Valentino with plans of a full acquisition and an investment from Mayhoola by 2028.

Disclaimer: The list isn't exhaustive, but there's enough to illustrate Kering's current situation.

 

[Nimsay]

Merci. I already had a write up and was waiting for this.


Gucci

• Focus on replacing LV - since LV is moving to Hermes level pricing.

• Should become italian ralph lauren

• Needs multiple mens and womens RTW lines at a time - a runway line, a black tie line, a casual line and a business line on top of the HC lines. All differentiated by label color.

• Reducing guccissima

• Raising proces through inxreasing quality
• Reducing costume jewelry and focusing on fine jewely
• Buying back their watch license and make watches in house

McQueen

• Desperately needs a presence in womens shoes and accessories.

• Should be modeled after Versace - everything produced needs to reference McQ
  
• Prices should be raised to Balmain level
• Expansion of Red Carpet presence and spend a lot
• The RTW, shoes and accessories have nothing to do with each other.
• The branding needs to become stronger - the RTW isnt the problem

• Needs someone to design more hit bags and shoes urgently

• Should be synonymous with amazing quality gowns, dresses and suits

Bottega Veneta

• Needs to return to being Italian Hermes. Has to be demi couture for billionaires who dont work.
• This brand needs no branding.

• Adding a mens and womens fine jewelry with intrecciato pieces seems like a no brainer too.
• Adding fine watches too

• Perhaps adding a signateur non leather material would be prudent. for customers who want BV quality but dont want leather.

• BVs heritage is precious artisnal leatherwoek - they should be putting out super-precious bags that cost 100k.

• Add housewears and maybe even some furniture - an intrecciato picnic set with real silver tablewear is a forgone conclusion.

YSL

• Get Haider
• Should be the direct competitor for chanel
• Pricing should be on par with current Dior
• Womens Handbag and shoe line needs to be expanded and refreshed urgently. More classic shoes and bags need to be created.
• RTW prices should increase but so should quality
• This brand should be the dominant Red Carpet presence at Kering and they need to sponsor a popstar
• Add a womens fine Jewelry with remakes of classic ysl designed jewelry
• Mens needs an expansion of suiting shoes and accessories too
• Keep the sort of 70s French jet set in a Chateau energy but turn up the maturity a little
• Needs a super expensive line of fragrance

Balenciaga

• Needs John Galliano doing mens and womens RTW and HC plus fine jewelry TBQH
• The prices need to be upped to Chanel level
  
• Keep the current handbag designer because the hourglass bag is a classic - so balenciaga has two classics now

• Expand handbags and shoes for men and women

• Add fine jewelry and watches for men and women designed by John too

• Needs super expensive fragrance

Brioni

• Keep it very neat and clean Italian contemporary
• Nothing crazy nothing wild - but sleek and new
• Think of how 300 year old italian apartments have updated to Pininfarina sleek kitchens - same principle
• expand mens bag and accessories presence - adding a luggage and trunk line

• Adding a mens fine jewelry and watches

• Super expensive mens fragrance too

Giambattista Valli

• Pretty much leave it as a niche HC brand
• Have Giambattista as a consultant for Gucci HC

Courrege

• Who asked for this?
  
• Turn it into Balenciagas streetwear cousin

The heirarchy by price point


Bottega

RTW womens coat - 12k


Balenciaga

RTW womens coat - 10k


YSL

RTW womens coat - 8k


McQ

RTW womens coat - 7k


Gucci

RTW womens coat 5k

Courrege

RTW womens coat 2k

 

[Benn98]

Interesting observations. As for Saint Laurent positioning itself as a competitor for Chanel? Maybe in another universe. Chanel is the most omnipresent brand in the world. Saint Laurent doesn't even come close. It would be a waste of time and effort.

I do think that the choice to part ways with Michele was way overdue, and Daniel Lee leaving was too soon. Very much doubt the Bottega customer who loved Daniel's work would continue to support the brand. Especially considering he's doing more of the same at Burberry.

 

[kasper!]

The only two steady parts of Kering is jewelry and eyewear department. Boucheron, Pomellato & Qeelin are doing good, but their presence at the market is still weaker than Richemont duo (Cartier & VCA). Kering eyewear is booming. It has become a major player in the field with Marcolin, Luxottica & Saflio.

 

[gallianostan]

Merci. I already had a write up and was waiting for this.


Gucci

• Focus on replacing LV - since LV is moving to Hermes level pricing.

• Should become italian ralph lauren

• Needs multiple mens and womens RTW lines at a time - a runway line, a black tie line, a casual line and a business line on top of the HC lines. All differentiated by label color.

• Reducing guccissima

• Raising proces through inxreasing quality
• Reducing costume jewelry and focusing on fine jewely
• Buying back their watch license and make watches in house

McQueen

• Desperately needs a presence in womens shoes and accessories.

• Should be modeled after Versace - everything produced needs to reference McQ
  
• Prices should be raised to Balmain level
• Expansion of Red Carpet presence and spend a lot
• The RTW, shoes and accessories have nothing to do with each other.
• The branding needs to become stronger - the RTW isnt the problem

• Needs someone to design more hit bags and shoes urgently

• Should be synonymous with amazing quality gowns, dresses and suits

Bottega Veneta

• Needs to return to being Italian Hermes. Has to be demi couture for billionaires who dont work.
• This brand needs no branding.

• Adding a mens and womens fine jewelry with intrecciato pieces seems like a no brainer too.
• Adding fine watches too

• Perhaps adding a signateur non leather material would be prudent. for customers who want BV quality but dont want leather.

• BVs heritage is precious artisnal leatherwoek - they should be putting out super-precious bags that cost 100k.

• Add housewears and maybe even some furniture - an intrecciato picnic set with real silver tablewear is a forgone conclusion.

YSL

• Get Haider
• Should be the direct competitor for chanel
• Pricing should be on par with current Dior
• Womens Handbag and shoe line needs to be expanded and refreshed urgently. More classic shoes and bags need to be created.
• RTW prices should increase but so should quality
• This brand should be the dominant Red Carpet presence at Kering and they need to sponsor a popstar
• Add a womens fine Jewelry with remakes of classic ysl designed jewelry
• Mens needs an expansion of suiting shoes and accessories too
• Keep the sort of 70s French jet set in a Chateau energy but turn up the maturity a little
• Needs a super expensive line of fragrance

Balenciaga

• Needs John Galliano doing mens and womens RTW and HC plus fine jewelry TBQH
• The prices need to be upped to Chanel level
  
• Keep the current handbag designer because the hourglass bag is a classic - so balenciaga has two classics now

• Expand handbags and shoes for men and women

• Add fine jewelry and watches for men and women designed by John too

• Needs super expensive fragrance

Brioni

• Keep it very neat and clean Italian contemporary
• Nothing crazy nothing wild - but sleek and new
• Think of how 300 year old italian apartments have updated to Pininfarina sleek kitchens - same principle
• expand mens bag and accessories presence - adding a luggage and trunk line

• Adding a mens fine jewelry and watches

• Super expensive mens fragrance too

Giambattista Valli

• Pretty much leave it as a niche HC brand
• Have Giambattista as a consultant for Gucci HC

Courrege

• Who asked for this?
  
• Turn it into Balenciagas streetwear cousin

The heirarchy by price point


Bottega

RTW womens coat - 12k


Balenciaga

RTW womens coat - 10k


YSL

RTW womens coat - 8k


McQ

RTW womens coat - 7k


Gucci

RTW womens coat 5k

Courrege

RTW womens coat 2k

john for balenciaga would only work if they're going for a complete image rehaul. i'd rather have him at mqueen, to be honest. the house codes align quite well with his design sensibilities. although, i don't think he'd ever do it considering lee was a contemporary of his.

 

[Nimsay]

john for balenciaga would only work if they're going for a complete image rehaul. i'd rather have him at mqueen, to be honest. the house codes align quite well with his design sensibilities. although, i don't think he'd ever do it considering lee was a contemporary of his.

do you have a alert for Galliano on here or something ?


I would do it because Balenciaga is the ancestor of Dior. John is from Gibraltar and Cristobal is from Spain.

That alone gives John a smorgasbord of authentic design codes to work from. I just think if he felt like reimagining the Flamenco dress again. John doing spain would put MGCs themed collections in the dirt.

Of course Kering doesnt make money moves. I would definitely focus on dismantling LVMH one by one through copying their model and making it more credible with better designers.

Galliano at Balenciaga would be the center piece of Kering. It would be seismic and become the most important fashion house in the world.

McQueen with Galliano would be disrespectful to John.

 

[Kerg]

The only two steady parts of Kering is jewelry and eyewear department. Boucheron, Pomellato & Qeelin are doing good, but their presence at the market is still weaker than Richemont duo (Cartier & VCA). Kering eyewear is booming. It has become a major player in the field with Marcolin, Luxottica & Saflio.

Saint Laurent is doing good, very good also. I think they should do Haute Couture again to be on the level of Dior. (Chanel will be too hard to cash up...)

 

[Nimsay]

Saint Laurent is doing good, very good also. I think they should do Haute Couture again to be on the level of Dior. (Chanel will be too hard to cash up...)

thats why John at Balenciaga would compete with Chanel because John is the only one who could. Nobody else can command 200k for a wedding gown other than Karl (or The Yves).

I think they wrote on here that YSL HC is not owned by Kering. It remains with YSL Foundation. I - too - think YSL needs HC. I think Vauthier could do a solid YSL HC.

I also think Pierre Berge protection of Yves name - even after death - should go down in history.

 

[gallianostan]

do you have a alert for Galliano on here or something ?

my name is gallianostan and i check the forums daily so idk what you were expecting?

McQueen with Galliano would be disrespectful to John.

i'm curious - why do you think this?

 

[blueorchid]

I would do it because Balenciaga is the ancestor of Dior. John is from Gibraltar and Cristobal is from Spain.

That alone gives John a smorgasbord of authentic design codes to work from. I just think if he felt like reimagining the Flamenco dress again. John doing spain would put MGCs themed collections in the dirt.

This is such an odd reasoning, imo. Besides, Balenciaga wasn’t “just” from Spain, he was Basque…

 

[gallianostan]

also, the optics of appointing a convicted/perceived antisemite as the creative director of a fashion house that is already loathed and steeped in controversy are... awful? how such a move would make it the most important or respected house in fashion is completely unknown to me. galliano at mcqueen would make sense because john and lee were basically the same person, just a few years and one or two sensibilities apart. they were both provocateurs: showmen who pioneered fashion theatre and utilised historicism widely throughout their oeuvres. it just makes sense. they represented two sides of the same coin; john was more flou and lee was more tailleur.

 

[LadyJunon]

My ideas on how Kering should proceed should be to:
• Stabilise Kering's houses in terms of branding and product ranges
• Grow Saint Laurent and Bottega Veneta to balance out Kering's overdependence on Gucci
• Rebrand Balenciaga and diversify the customer bases among Alexander McQueen, Balenciaga and Valentino
• Diversifying the houses from each other in terms of visuals and price range to increase each houses reach
• Bring Brioni and the hard luxury houses into the limelight

Spoiler: House by House Analysis

Gucci:
• Use Sabato's tenure to re-establish a permanent core offering
• Launch a line of men's and women's suiting to accompany the seasonal collections
• Integrate Belletini's "Seasonless Strategy"

Saint Laurent:
• Cement Slimane/Vaccarello's star designs as the permanent core offering
• Launch a seasonless core suiting/tuxedo offering for women and men
• Strengthen the menswear offering to appeal to modern male tastes
• Consider a full relaunch of the Haute Couture operation

Bottega Veneta:
• Use Blazy's tenure to re-establish a permanent core offering
• Integrate Belletini's "Seasonless Strategy"

Alexander McQueen:
• Pull the house away from the slightly dated "Anglo-Romantic" feel
• Strengthen the womenswear side of the house with stronger bag and shoe offerings
• Divorce the womenswear and menswear collection for shows

Balenciaga:
• Pull the house away from Demna's visual codes
• Strengthen the womenswear side of the house with less aggressively masculine visuals and offerings
• Divorce the womenswear and menswear collection for shows
• Consider a full relaunch of the Haute Couture operation

Brioni:
• Reintroduce the brand to modern luxury audiences
• Shift the house to follow a model similar to Zegna's
• Expand and push on the bag and shoe offerings

Giambattista Valli:
• Keep the house relatively small, but sturdy
• Push Valli to appeal to a slightly older clientele
• Expand and push on the bag and shoe offerings

Courrèges:
• Focus on the upper-contemporary market
• Use the Loop Bag and Rééditions Collection as brand classics

Valentino:
• Finalise acquisition of the house
• Pull the house away from PPP's visual codes
• Strengthen the menswear side of the house with less aggressively saccharine visuals and more substantial menswear offerings
• Strengthen the bag and shoes offerings for men and women

Hard Luxury Houses:
• Strengthen the presence in their industries and establish brand identities for each house

Some of these would require a change of Creative Director, Design Team or even CEO, but I feel that it would be beneficial to these houses in the long term. If done well, Kering might be able to hold their own without the need to a Richemont-Kering merger.

 

[LadyJunon]

BoF has just released a podcast episode featuring Francesca Bellettini, CEO of Saint Laurent: Francesca Bellettini on Managing Creativity, Customers and the Bottom Line

I can't be the only one who finds it interesting how aggressively they've been pushing the success of Saint Laurent, especially with most of the articles centering around Bellettini instead of Vaccarello. The biggest irony of the whole thing is that Saint Laurent is also the one with the most traditionalist and purist modus operandi, something that the house was often criticised for.

Looking at the online store, Saint Laurent's core ready-to-wear offering primarily consists of classical bourgeoisie sportswear and suiting. Their accessories consist primarily of minimalist leather bags and stiletto heels. The core accessory range primarily consists of minimalist leather bags, brutalist jewellery and stiletto heels. The menswear more or less mirrors the womenswear. Sneakers are towards the back of the line.

The pricing is relatively modest with most of the offering hovering at €1'000 to €3'000 with very few items surpassing the €5'000 mark. Several of the house's entry-point bags and shoes are under €1'000. They also completely eliminated mid-season and end-of-season sales, instead preceding with private sales to loyal long-term customers.

I imagine that the classical semi-formal styles must appeal to the tastes of a wide range of luxury customers, while still retaining a very luxurious edge. The competitive pricing in accessories allows for a sufficient platform for the brand entry-point products, while the elimination of seasonal sales emphasises the brand's permanent value.

 

[LadyJunon]

BoF has just released a podcast episode featuring Francesca Bellettini, CEO of Saint Laurent: Francesca Bellettini on Managing Creativity, Customers and the Bottom Line

A paraphrase of the podcast episode:
Context: the audio is an archive interview with Imran Amed from BoF VOICES 2018 that has been re-edited as podcast episode.

On Slimane's debut at Celine
She's happy for Hedi's comeback as she values creativity and talented designers in fashion, regardless of where they are. She believes that Hedi's appointment is good for the industry as a whole.

On the Hedi Slimane/Saint Laurent Rebrand
She believes that Slimane revived Saint Laurent and brought the brand back to its origins and values established in the late 60s and 70s with his consumer-centric designs and moody rebellious imagery. She also notes that the entity that Kering owns is actually "Saint Laurent Rive Gauche" not the original couture house, "Yves Saint Laurent". She says that throughout time, "Rive Gauche" shifted to replace the couture house in a way.

She says that when she first joined, she noted that throughout the shifts in creative directors, the most valuable assets were the accessories, allowing for a lot of profit, leading to reinvestment in the brand. At the time, the brand was already very balanced in terms of product categories, geography and brand distribution, without being overexposed.

She also acknowledges that every revolution needs a constitution to create longevity of the brand, which is her goal with Anthony Vaccarello's appointment at Saint Laurent, noting that a lot of CEOs neglect the bottom line in favour of overfocusing on the volatile top line.

On the Saint Laurent Clientele
She says that when the creative director of a brand changes, their fans disappear within the following six to eight months. The impacts on the departure hit differently each time, as they're dependant on the creative director's most popular product categories and the demographic targeted during their tenure. The largest area of Saint Laurent's losses were amongst male consumers in Japan, where Slimane is extremely popular.

She states that while there was a loss of Hedi's fans, there was also the gain of Vaccarello's fans as well the fans of Saint Laurent the brand, therefore Celine had no effect on Saint Laurent as they've already experienced it. That said, she says that in fashion, at least 70 to 80% of a brand's annual consumers is completely new, therefore she needs to come up with ways for Saint Laurent to advance without compromising the brand.

She says that while the latest incarnation of Saint Laurent incorporates versions of several products from previous creative directors as part of the core offering, the current star product was conceived by Vaccarello. She believes that this is because the product was well designed, well merchandised and released within the perfect timeframe and context, leading for the consumer to see it as authentic.

On Chinese Luxury Consumers
She believes that China is still a very valuable market for Saint Laurent. She states that while China is no longer in a period of very fast growth, a growth that she says is very unsustainable, the country is still a fruitful venture for brands who are yet to be exposed to Chinese consumers. Previously, brands would confuse population numbers with potential consumers, when choosing a store location. She says that Saint Laurent is opening two flagship store in the country, Beijing and Shanghai.

She likes China's new policy of focusing on local businesses and believes in focusing on local consumers, stating that she directed each regional manager to focus on creating strong business with the local markets instead of seducing volatile tourists who come and go. She believes that this method is more authentic to each individual region.

She looks back on a trip with Saint Laurent's merchandising team to Marrakesh, where her goal was to educate the team about the history of the house and the founder. She believes that people are a business' primary asset, so it's important to treat them well for them to become and remain passionate for the company they work for and to transfer that passion to the consumer. For her, it's better to hate the truth than to love the lie.

Advice
She advises to believe in what you're doing and to try to distance yourself away from people who put you down solely because you're a woman (also applies to any other minority).

 

[Nimsay]

A 5 year old interview ? Am i reading that right.

 

[LadyJunon]

A 5 year old interview ? Am i reading that right.

Yes you are.

BoF released part of the BoF Voices as a podcast episode 5 years later. Funny enough, the content is still very relevant, but that's mostly due to how Bellettini's long term thinking has benefited Saint Laurent.

 

[jeanclaude]

I´d love if Kering (and LVMH and Richemont) all disappeared, and they sell all their brands to different people...so each brand could be independent again.
I am fed up of all this conglomerate crap, that it is making fashion look stale and boring.

Back to reality, it´s not going to happen...but I´d love if it would...

 

[LadyJunon]

I´d love if Kering (and LVMH and Richemont) all disappeared, and they sell all their brands to different people...so each brand could be independent again.
I am fed up of all this conglomerate crap, that it is making fashion look stale and boring.

Back to reality, it´s not going to happen...but I´d love if it would...

To be fair, the biggest reason why these conglomerates exist is because most of these designers (understandably) failed to bear children or insert a stable succession plan. That's the only reason why Chanel, Hermès and almost all of Italy's brands are standalone companies.

 

[Drusilla_]

To be fair, the biggest reason why these conglomerates exist is because most of these designers (understandably) failed to bear children or insert a stable succession plan. That's the only reason why Chanel, Hermès and almost all of Italy's brands are standalone companies.

yeah Armani is an independent, so is Ferragamo, and the other S.p.A.-ed up Italian houses seem to operate in small clusters of brands (Prada, OTB) rather than the massive umbrellas which the French conglomerates take on. Even the Michael Kors acquisition of Versace didn't slot it into a huge group of 10+ other brands iirc.

 

[LadyJunon]

WWD predicts that Kering × Valentino will provoke an trend of luxury acquisitions:

Kering-Valentino Deal Helps Reignite Luxury M&A Market

High-end mergers and acquisitions seem to be heating back up after a spate of dealmaking.

By EVAN CLARK
AUGUST 1, 2023, 1:00AM

Dealmakers sleepwalked into 2023 — not ready to commit with high inflation, high interest rates and fears of recession conspiring to muddy the outlook for just about everything.

KPMG logged just 191 retail deals in the first quarter, a 40 percent drop from the fourth quarter and a 99 percent plummet in total deal value after the nearly $25 billion supermarket merger between Kroger and Albertsons revealed in October.

But a funny thing happened as the world waited for recession.

The rich kept spending, the economic worries subsided some and the luxury deal market awakened this summer — not gradually but all at once.

The jolt of life came from Kering, which snatched up the high-end fragrance house Creed for a reported $1.5 billion in late June, and then followed that up last week with a deal to buy 30 percent of Valentino for 1.7 billion euros, with an option to buy full control of the tony brand by 2028.

Kering rival Compagnie Financière Richemont confirmed the new trend on Friday, buying a controlling stake in Gianvito Rossi and registering a vote of confidence for sophisticated heels in a world of sneakers.

Every deal gives the market another data point to work with — at least when the prices are made public.

And the Valentino deal suggests luxe is alive and well.

Kering is buying into Valentino at a price that equates to 16.3 times earnings before interest, taxes, depreciation and amortization of 350 million euros. That is in line with other valuations in high luxury.

It also reflects the growth of the brand under its current majority holder, Mayhoola, which bought Valentino in 2012 when it had EBITDA of just 22 million euros annually.

Mayhoola paid about 700 million euros, or 2.2 times revenues — a multiple that has expanded to 4.1 times in the Kering deal.

That’s in keeping with the 4.4 times revenues LVMH Moët Hennessy Louis Vuitton paid for Tiffany & Co. in 2021 and the 4.2 times revenues VF Corp. paid for Supreme in 2020.

To some degree, Kering is playing catch-up, trying to regain the momentum that has been lost as its largest brand, Gucci, has slowed.

Valentino helps reassert the company’s uber-luxe positioning with both Creed and Valentino.

If that sounds like a lot of moving parts — a main brand that’s looking to get its mojo back, a big move in beauty and a big stake in Valentino — that just might work to Kering’s advantage.

Erin Schmidt, an independent retail industry consultant, said, “Perhaps this is a great time to do it, while there are a lot of moving parts. This is a time of change and evolution. I believe at Kering these are exciting changes for them and they’re also seeing growth in their other brands, like Bottega Veneta and YSL.”

While market observers don’t expect the market to go into overdrive, mergers and acquisitions are clearly back on the table, along with IPOs, with Birkenstock said to be exploring its options and Kim Kardashian’s Skims preparing to take the plunge.

And while the case still needs to be made for any wheeling and dealing in more mainstream brands, it seems to be all lights green when it comes to brands with deep heritage that sell to the one percent of the one percent.

“There’s going to be continued activity in the luxury sector that targets the ultra-high net worth individual,” said Cathy Leonhardt, partner and co-head of consumer retail at Solomon Partners. “And you’re not seeing it only in fashion and luxury goods, but you’re seeing it in fragrance. You’re going to see it in beauty. We’re seeing it in food.

“When you look through the earnings releases and what all these luxury houses are saying, the aspirational consumer’s not doing as well,” Leonhardt said. “So I do think you’re going to see more deal activity around the ultra-high net worth individual and how they’re shopping.”

And so the big luxury players like Kering, Richemont and LVMH are also going to be shopping.

“They’re always going to be searching for that next asset that they can build and grow,” Leonhardt said. “And there’s huge value creation when these businesses come under an umbrella of the true luxury house. There’s scarcity in true luxury houses. Any authentic brand with a deep heritage, that’s what they’re on the hunt for. There are fewer and fewer of those. They don’t make them every day. And you have to grow them, build them.”

Source: WWD