Discussion: The State of Kering

[fashionisnotfunanymore]

My prediction: Demna will beat Sabato but his Gucci will not replicate the success of Alessandro Michele’s or Frida Giannini’s earlier tenures—let alone invite any comparison to Tom Ford. Gucci will continue to falter until Saint Laurent emerges as Kering’s flagship brand. If Maria Grazia Chiuri manages to carry over her commercial appeal from Dior back to Valentino, we could see a new hierarchy take shape. YSL > Valentino > Gucci by year 2030.

 

[justpassingthrough]

Luca de Meo at Kering: Revolutionizing Luxury with Speed and Customer Focus

Explore Luca de Meo's new rules to revive Kering: halving production times, customer-centric approach, and early positive results at Gucci. A paradigm shift from automotive to fashion.

www.nssmag.com

 

[style_expert]

Kering’s stock is up 30% since the beginning of the year. It started to climb after Luca de Meo’s appointment was announced. I guess it will take some time before we see the first effects of any changes he’s proposing.

 

[justpassingthrough]

 

[LadyJunon]

So their chance at their biggest possible cash cow is now in the hands of L'Oréal for a mere €4bn. Fantastic.

 

[Kanzai]

Yes, very well L’Oreal!

 

[Kimihiro]

Why are they making the same mistake twice? They should offload creed but should try to keep beauty in house. I know there are money issues but you know…

I’m really not against dismantling Kering at this point. They should free themselves of YSL.

 

[Vikingtop]

The new CEO seems to change the strategy of the conglomerate quite strong.... this is a major change in strategy. I think if they sell now Kering Beauty they will never get it back.

But if this is a good occasion.... Kering bought Creed Perfume...for 3.5 billion....now they sell again.. for 4 billion maybe.....

 

[Lola701]

For me it’s a stupid decision on a long term. It will solve a short term issue (like selling YSL beauté did to PPR at the time) but they will lose in the long term.

And again I don’t understand why they only launched niche fragrances for Balenciaga and BV as those brands probably need 1 mainstream fragrance.

For me, Kering beauté is an asset.

It’s ridiculous to think that Kering beauté will own for 50 years the right to exploit the beauty entities of those brands. 50 years is INSANE!

 

[FashionPower]

Stupid business move indeed.
What was the point of acquiring Creed just to sell it, alongside all the other licenses, after roughly 2 years?
Also, were they fighting with L'Oreal to get back the YSL beauty license?
Now we're gonna keep getting YSL fashion direction completely detached from the makeup artistic vision (they are still stuck in the Hedi heroin rock chic...).
Meanwhile we have 10 and 8 niche different parfums for Balenciaga and Bottega, respectively, while competitors focus on maximum 4 items with better management and sales (at YSL they're pushing on Black Opium, Libre, MYSLF and all the flankers).

 

[AFWQ]

I was just reading this at Reuters: Kering sells beauty unit to L'Oreal for $4.7 billion as de Meo trims debt

4 billion euros in Kering's pocket. And "Shares in Kering jumped 4.7% while L’Oreal rose 1.4%."

Kering has more than 9 billion euros in debt.

 

[style_expert]

Kering so overpaid for Creed that they now have to give away the beauty licenses to their brands almost for free... Tragic and short-sighted. A fantastic deal for L'Oréal!

I guess Luca de Meo had very few other options to raise cash and pay off some of that enormous debt. Yet in a challenging market, beauty could have been a huge, safer revenue base for the future.

 

[hamburgers]

The best case scenario here is if they wrangled more creative output with advertisement like Valentino, Prada, Margiela, etc. did because the old contracts with YSL and Armani is just one populist horror after another.

They're also looking for buyers for Kering Eyewear...

 

[AFWQ]

For some numbers I saw, luxury goods aren't selling as well as it used to. People are containing to spend to certain level, specially upper class.

Maybe this was only option at this moment.

In reuters article they do say Kering is looking in to real estate.

 

[Nimsay]

Not them setting Bellatini up to take the fall for Demna - they really said, “walk the plank!”

I told you guys - Kering is wide open to corporate raiders. They’ll swoop in, break the group apart for scraps, and then quietly move on to the very companies they sold the pieces to.

 

[Nimsay]

As far as luxury goods go, I think luxury shoppers are starting to rebel. No one I know is struggling financially - they’re just fed up with how absurd some of these prices have gotten. Gucci clearly got the memo with its recent price realignment - plenty of pieces now under $2K. Honestly, I have no idea why they ever thought they could get away with $3.5K entry cost in the first place. Those Blondie bags from last year partly flopped because of the outrageous prices.

 

[FashionPower]

As far as luxury goods go, I think luxury shoppers are starting to rebel. No one I know is struggling financially - they’re just fed up with how absurd some of these prices have gotten. Gucci clearly got the memo with its recent price realignment - plenty of pieces now under $2K. Honestly, I have no idea why they ever thought they could get away with $3.5K entry cost in the first place. Those Blondie bags from last year partly flopped because of the outrageous prices.

I agree, Gucci reached top bottom with Sabato's debut collection, I still remember the Gucci logo 90% polyester basic gray hoodie sold for 2,8k or something like that.
Just for comparison, you can get a full cachemire Dior knit with Pietro Ruffo print for a price range between 1,5 - 2k...

 

[justpassingthrough]

It’s happening

 

[Nimsay]

Why not terminate him and get like anyone who can sew two pieces together in here ?

 

[FashionPower]

With Burton leaving they lost all the customers who loved and enjoyed her sharp tailoring.
Mcqueen business was sustained by those very tacky "status symbol" platform sneakers, the skull head clutches / accessories and the tailoring.
Under McGirr the brand became insipid and just bland, no one is going to spend those figures for a C-list brand when you can get status symbol Dior and LV by splurging 20%...it's not like a Mcqueen jacket is 1k and a Dior one is 4k...
The funniest thing is that Mcqueen lost the tailoring when Sarah left but Givenchy didn't earn it when Sarah joined lol. Givenchy's current selection is abysmal.