Discussion: The State of Kering

[yslforever]

Even one that still has a rather positive perception from the outside like Bottega Veneta, I'm told is not performing as well as it could (allegedly they sell their Andiamo bag well, but shoes and RTW are not moving at all). I doubt their perfume is going to be so much of an "entry point" per se, if the positioning is confirmed to be the one I was told recently...

BV shoes and RTW are too chunky, it was a novelty thing in 2018 and 2019, with the Puddle boots etc but that was 5 years ago. Blazy continues to make everything intreciatto, or double intreciatto, and it ends up looking extremely thick, à la Kalimero.
I do think a part of the Andiamo success is the colour palette, which is much more subtle and timeless, compared to the loudness of the other lines. At those prices, customers will look for colours that will survive the trends.

 

[tourbillions]

that yellow.... no one wants it

im afraid they will really try to balenciaga/guccify mcqueen. i see a lot of skull scarves in their future. The good thing when their sneakers went big was that they still offered amazing, tailored pieces and remained pretty much in the when you know you know realm. Their customers didnt even bother with their logo pieces.

 

[style_expert]

The pictures of the Gucci store in Soho. Shocking to be honest, it looks so terribly outdated and like an amateur interior design project gone wrong. That Gucci Ancora rebranded store in Milan wasn't great but this really is awful.

I can not really understand the business strategy for Gucci at all. Spending so aggressively on marketing, without any exciting or desirable products and without a retail strategy that makes sense for a luxury brand on that kind of revenue level. It seems they grossly overestimate the intrinsic brand value of Gucci, betting on that people will continue to buy just for the sake of it being Gucci. Maybe 10 or 15 years ago that would have been the case, but the market has gotten way more competitive and guess what, you need to put in some sort of effort in creating a desirable product.

I wonder what kind of role Mayhoola can play for Kering in the future. I wouldn't be surprised if selling Valentino to Kering was just a way for Mayhoola to get a foot in the door.

 

[Frederic01]

Even one that still has a rather positive perception from the outside like Bottega Veneta, I'm told is not performing as well as it could (allegedly they sell their Andiamo bag well, but shoes and RTW are not moving at all). I doubt their perfume is going to be so much of an "entry point" per se, if the positioning is confirmed to be the one I was told recently...

Yes, speaking of Bottega, what’s going on with them? The hype surrounding the brand seems to have completely died down. I wonder how their products are selling, especially the RTW and shoes?

 

[Thefrenchy]

^ They're pushing celebrity placements a lot in an attempt to sell shoes and bags, but they're going in circles brand-wise... I wonder how long Blazy signed for. I'd assume 3 years. And he was named CD in 2021...

 

[Nimsay]

McQueen is the only Kering brand with any real clout in the Normies eyes. McQueen is as high as Balmain Chanel Dior Vuitton in normies eyes.


Bottega basically has no codes outside of Intrecciato. IIRC they used to do bags with Murano charms in the early 00s. They should bring those charms back. I remember they scuttled those for when Luella Bartley? did BV and came out with those spray painted RTW and bag collections. Bottega has been trying to be an It brand for nearly 2 decades ATP


I got an Andiamo - a few - purely because the colors. That person is right. I couldnt resist their Coffee brown or their butter vanilla colors. The andiamo itself is like a kelly birkin hybrid.

 

[LadyJunon]

Bottega basically has no codes outside of Intrecciato. IIRC they used to do bags with Murano charms in the early 00s. They should bring those charms back. I remember they scuttled those for when Luella Bartley? did BV and came out with those spray painted RTW and bag collections. Bottega has been trying to be an It brand for nearly 2 decades ATP

It would be so much better if Bottega Veneta pushed themselves more in the direction of becoming a modernised Italian Hermès. Subtle, but beautiful with the weird trompe l'œil piece here and there.

 

[Olaffo]

If they won’t renew Bazy’s contract for another 3 years and install new CD I’ll honestly return my bags. The state of Kering now is a complete mess. Gucci is trash and this “Ancora” circus will backfire soon, god knows what will happen with McQueen, Balenciaga is honestly just about to be completely redone and everything is hanging on YSL thread. It is a stark contrast with boringly well oiled and run machine of LVMH…

 

[Nimsay]

Im still optimistic on Ancora. The people that ive talked to about - who are gucci shoppers - seem very pleased. They are happy to lose the logomania. These people are so rich they buy gucci they dont neccessarily like because where else are they shopping. They just bought Allesandros toned down pieces. Some people are very brand loyal. Buying only Italian designer label is not an uncommon behavior.


I always said all Sabato has to do is Allesandro. Gucci desperately needed more wearable materials and colorways. Micheles shapes were always very good to excellent - I guess Alessandro was unable to edit his own material choices and evolve.

 

[NoInvite]

In comparison with LVMH (and Chanel, Hermes) they have been building their narratives around craft, savior fair. LVMH top brands LV, Dior, Loewe; they have really put effort in the creation of this narrative. Maybe it's just an illusion of couture and handmade but the public connects to this and they have been building it for years. Great example is the Dior store that basically now a museum. The last 10 years top Kering brands Gucci, Balenciaga, YSL have been delivering fashion, pure heavy fashion. They had their moments but now maybe it's slowly fading as the report shows. Their only chance was Bottega, under Tomas Maier it felt like like an alternative to Hermes. Then it was flipped into another fashion brand under Daniel Lee. For the masses their portfolio is just not as strong in the public perception as LVMH brands.

 

[Nimsay]

Gucci has always been considered lower quality than most designer labels. Even the people that shop there think that. Gucci has never been associated with that long lasting construction that Pierre Balmain, Christian Dior or Chanel has always been associated with.

LV used to be associated wjth that sort of not worth the money cheapness. This is partly because their main US sales were from monogram canvas. LV has pretty much totally shaken off any hint of their possibly “cheap” product. Everything they make now has been transited from a simple pochette to a post modern statement on living. Designed by the best minds in fashion with product management people totally on the pulse of society. LV used to be considered not worth the price by me - now I think its almost a value. LV does the job of a lifestyle brand.


Anyway kering should hire me. Gucci needs an Alta Moda per Donna and Uomo if they plan to drop this lower quality image. Those $900 lurex polos and 4k swarovski tracksuits did not help that impression. They also need to come out with some haute horologie

 

[tourbillions]

I think Bottega lost their regular clients once daniel lee took over. They always had some sort of clout who liked the not so loud branding of bottega. I really liked it pre-daniel lee. I couldnt afford it back then but i wished to have a lot of the classic things they offered. Now that i can afford it, everything in store just looks like it will be has-beens after the current season.

ofcourse they had to mess it up in the hopes of becoming another gucci/balenciaga.

 

[Kimihiro]

Few years ago Kering’s designer-led approach helped them but now it’s biting them. Fashion can be so disposable.

Are the Pinaults impatient? With LVMH I get the feeling that they’re building things long-term. Maybe because Arnault could afford it. JWA’s decade-long building of Loewe or Hedi’s wholesale reconfiguration of Celine are good examples of how to elevate brands but it takes years, and talents who know what they’re doing. It’s a 360 approach inching those brands to being lifestyles.

It’s harder with Gucci because it’s more established and it’s not easy to wash off its cheap associations but I guess that’s what you get when you spent almost a decade wh*ring it out. There are no compelling products on the top end to counterbalance merchandise. They don’t have Dior’s couture line to project that image. Even Prada can rely on Miuccia’s long-gone fashion authority to sell those merch.

The bet is on Saint Laurent, but as beautiful the shows are I don’t know if they have it in them to grow it twice the size.

 

[Drusilla_]

that yellow.... no one wants it

im afraid they will really try to balenciaga/guccify mcqueen. i see a lot of skull scarves in their future. The good thing when their sneakers went big was that they still offered amazing, tailored pieces and remained pretty much in the when you know you know realm. Their customers didnt even bother with their logo pieces.

the thing was, even the skull scarves (McQueen's entry-level logo product) were in keeping with the spirit of what the brand was known for (dark, slightly morbid, very into the natural world, but romantic). The trainers as a single product, didn't overshadow the rest of the McQueen product offering and Sarah Burton deserves credit for steering the brand through the last 13 (from 'normcore' to 'quiet luxury') years without trashing its rep.

I'm more worried about what might happen if Kering sees McQueen as its new cash cow and starts demanding multiple of these cheapening 'entry-level logo' products.

 

[yslforever]

Anyway kering should hire me. Gucci needs an Alta Moda per Donna and Uomo if they plan to drop this lower quality image. Those $900 lurex polos and 4k swarovski tracksuits did not help that impression. They also need to come out with some haute horologie

I don't know how to post images but the comparison side by side of the Gucci watches vs LV Tambours, is astonishing, Gucci's ones look like the cheapest chinese reps of many brands.
LV Tambour (and the Hermès ones too) are ten leagues highers.

I also agree with NoInvite, Tomas Maier BV was the closest to Hermès they have ever been, but Kering being impatient preferred to shurn it out in state of slowly building a true luxury; no wonder Tomas Maier is now consulting with Hermès.

 

[tourbillions]

Unfortunately for their old clients... Mcqueen still has a good street rep in this generation. Even without knowing what their actual fashion offerings are. They are the type that will namedrop mcqueen even without knowing that the amazingly tailored coat you're wearing is mcqueen. So with a lot of marketing and a little push to kpop stars, and a decent amount of "bad ***" logo pieces they will achieve the "it" brand level easily.

But again... that is only going to work short-term unless Mcgirr actually has the talent to evolve from that. Burton's Mcqueen was definitely made for longevity.

 

[LadyJunon]

The issue with Kering is that all of their brands are designer-centric. While it's fun for the runway, it leads to these houses creating "cults" around the creative director rather than the brand itself. This can work for a smaller brand that makes 50-200 million, but after the 1-2 billion milestone, a brand really needs to be desirable in spite of the current creative director. From there, it's really just basing itself on the myth of the founder (Chanel, Dior) or the house's extensive resources (Hermès, Louis Vuitton).

They also made the mistake of putting all their eggs in Gucci's basket. For context, Kering makes 19.6 billion:
• 9.9b from Gucci (50.4%)
• 3.2b from Saint Laurent (16.2%)
• 1.6b from Bottega Veneta (8.1%)
• 3.5b from their other houses (17.8%)
• 1.5b from Kering Eyewear (7.5%)
While it's more than fine to have Gucci as the primary cash cow, the combination of Saint Laurent and Bottega Veneta should've been big enough to support Kering in the case that Gucci has a flop era. Kering wouldn't be in this situation if their revenue distribution looked more like this:
• Gucci (35%)
• Saint Laurent (25%)
• Bottega Veneta (15%)
• Other houses (17.5%)
• Kering Eyewear (7.5%)

Gucci has two problems. The first is that their core product range is kind of ugly and dated across the board. The second is that they've already created cults around two of their previous creative directors: Tom Ford and Alessandro Michele
They need to make Sabato's Gucci look very desirable without creating yet another cult around him.

Saint Laurent is doing fine, but will need to double its revenue to become another main pillar for Kering. Without YSL Beauty (makeup, skincare and fragrances), it could easily take 10+ years to achieve those numbers. Kering probably only has 2-3 years, unless they get Gucci back on track.

Bottega Veneta's intrecciato is too eccentric to be another Hermes, but they could easily be another Loewe/Fendi. Use the Andiamo to reintroduce their more classical designs in a wide range of colours: charcoal, slate grey, chocolate, buttery yellow, cream and maybe green and throw a designer who can make interesting, but wearable clothes and shoes on top of that.

It would be much more advisable to retain Balenciaga and McQueen as self sustaining "high fashion social currency", instead of trying to turn them into cash cows. Of course, both brands will need creative directors that can produce 360° visions and retain long tenures. Meanwhile, they could push Brioni in the direction of Bottega Veneta.

 

[yslforever]

The issue with Kering is that all of their brands are designer-centric. While it's fun for the runway, it leads to these houses creating "cults" around the creative director rather than the brand itself. This can work for a smaller brand that makes 50-200 million, but after the 1-2 billion milestone, a brand really needs to be desirable in spite of the current creative director. From there, it's really just basing itself on the myth of the founder (Chanel, Dior) or the house's extensive resources (Hermès, Louis Vuitton).

They also made the mistake of putting all their eggs in Gucci's basket. For context, Kering makes 19.6 billion:
• 9.9b from Gucci (50.4%)
• 3.2b from Saint Laurent (16.2%)
• 1.6b from Bottega Veneta (8.1%)
• 3.5b from their other houses (17.8%)
• 1.5b from Kering Eyewear (7.5%)
While it's more than fine to have Gucci as the primary cash cow, the combination of Saint Laurent and Bottega Veneta should've been big enough to support Kering in the case that Gucci has a flop era. Kering wouldn't be in this situation if their revenue distribution looked more like this:
• Gucci (35%)
• Saint Laurent (25%)
• Bottega Veneta (15%)
• Other houses (17.5%)
• Kering Eyewear (7.5%)

Gucci has two problems. The first is that their core product range is kind of ugly and dated across the board. The second is that they've already created cults around two of their previous creative directors: Tom Ford and Alessandro Michele
They need to make Sabato's Gucci look very desirable without creating yet another cult around him.

Saint Laurent is doing fine, but will need to double its revenue to become another main pillar for Kering. Without YSL Beauty (makeup, skincare and fragrances), it could easily take 10+ years to achieve those numbers. Kering probably only has 2-3 years, unless they get Gucci back on track.

Bottega Veneta's intrecciato is too eccentric to be another Hermes, but they could easily be another Loewe/Fendi. Use the Andiamo to reintroduce their more classical designs in a wide range of colours: charcoal, slate grey, chocolate, buttery yellow, cream and maybe green and throw a designer who can make interesting, but wearable clothes and shoes on top of that.

It would be much more advisable to retain Balenciaga and McQueen as self sustaining "high fashion social currency", instead of trying to turn them into cash cows. Of course, both brands will need creative directors that can produce 360° visions and retain long tenures. Meanwhile, they could push Brioni in the direction of Bottega Veneta.

Thank you for your analysis; Kering brands being designer-centric is one their strategic flaw. I have said for a while that if a house wants to grow and transition from fashion-centric to a luxury lifestyle house, they need several CDs; one for menswear, one for womenswear, one for image, one for beauty, more for jewelry, watches, house items etc. That's the case at Hermès, Dior, Vuitton... When De Sarno was announced, I just wondered: why only one CD for such a large brand ? Many designers aren't good enough in both menswear, womenswear and accessories, those who are are the exceptions.
Even a house like YSL needs a menswear designer...

 

[Frederic01]

I just saw the prices of the “New Gucci” on their website, which is ridiculous for what it is (Basics).

Kering’s only strategy is to raise the price of everything but not the quality or the design level. Good luck with that.

 

[Frederic01]

$3900 for this? A wool, viscose, polyamide blend!


GUCCI