Discussion: The State of Kering

[Kimihiro]

Prior to the pandemic I had this impression that Kering was the more design-led group. You had AM, Demna and Daniel Lee. All those appointments, starting with Slimane at YSL shot Kering up. I guess it was too pop. It’s not as if the runway spectacles are what sells most. Not to mention on a product level their bags were subpar sans Bottega, and that was riding on Daniel Lee. It’s only in the last few years of Demna (although too late) that there’s something interesting in their bag department.

LVMH meanwhile took the time to institutionalize their brands, like Dior and Celine while still maintaining cultural relevancy with Loewe. These 3 brands along with Vuitton and later Loro Piana appeared better values than their disposable Kering counterparts. For all the buzzy moments for Kering brands, their brand equities never really took off sans Bottega. Gucci is overexposed, Balenciaga is tired, Saint Laurent outside the shows doesn’t make sense and still not at the place it should be.

 

[PDFSD]

Prior to the pandemic I had this impression that Kering was the more design-led group. You had AM, Demna and Daniel Lee. All those appointments, starting with Slimane at YSL shot Kering up. I guess it was too pop. It’s not as if the runway spectacles are what sells most. Not to mention on a product level their bags were subpar sans Bottega, and that was riding on Daniel Lee. It’s only in the last few years of Demna (although too late) that there’s something interesting in their bag department.

LVMH meanwhile took the time to institutionalize their brands, like Dior and Celine while still maintaining cultural relevancy with Loewe. These 3 brands along with Vuitton and later Loro Piana appeared better values than their disposable Kering counterparts. For all the buzzy moments for Kering brands, their brand equities never really took off sans Bottega. Gucci is overexposed, Balenciaga is tired, Saint Laurent outside the shows doesn’t make sense and still not at the place it should be.

true that Kering was the more design-led group, but their big mistake was to not build core continutive lines based of archive items instead each designer kind of completely rehauled the brand and focused on novelty that dont hold up with resale value unless it was trendy.

when the shift post pandemic went to owning investments leather goods all their brands had no real investment value post leather goods as it was based on contaszant novelties.

look at all brands that still do well its because resell value of their product is high or like hermes case higher than store price its very much a concept from hard luxury , watches , cars , or property it should gain value with time not loose..

they bet again on a short term hype designer like demna to rehaul gucci ....so far he is struggling to have a true vision that can impact the business bottom line.

time will tell but often disasters repeats till we learn to do better choices

bottega escaped most of the issues but remember it got to 1 billion with thomas already in and then hype came to the brand with lee and blazy made a mix of craft and hype fashion while the products them self hold most value with out having a logo so that saves it now and they manage to keep so idea in people minds of quality

From 2001 kering bought BV to 2010, Bottega Veneta's sales grew 15-fold and reached the 1 billion mark in 2012. because Tomas Maier creative director for 17 years

Bottega Veneta revenue was bit down round 1.1 billion in 2018 when Tomas Maier left
Bottega Veneta revenue exceeded €1.5 billion in 2021 when Daniel Lee left
Bottega Veneta's revenue amounted to €1.7 billion,in 2024 when Matthieu Blazy left
We see how post tomas the business did not grow that much, if you compare it with:
Hermes € 5,9 billion in 2018 to €15.2 billion in 2024
Chanel $11.12 billion in 2018 to $18.7 billion in 2024
Louis Vuitton comfortably exceeded €10 billion in 2018 to Louis Vuitton surpassed €20 billion in revenue for the first time in 2022.

this shows that noise is great at kering when things are good but sales growth is slower than with brands that have a bigger classic lines or post sales value retention either or both.

 

[style_expert]

All of you have already said wise things. I think it basically boils down to short-term thinking versus long-term strategic planning (at which, for example, Hermès truly excels). When Kering had its big moment with Alessandro Michele’s Gucci, they enjoyed the success so much that they just kept pushing the same recipe onto the market. At some point, the consumer wants a somewhat new menu and they’re terrible at anticipating that moment. And clearly, they still haven't learned with Demna's appointment at Gucci (again more of the same!)

Add to that their huge exposure to wholesale (including Gucci and even Bottega) and all the negatives that come with it: limited control over pricing and markdowns, weakened brand image, and overexposure in their own retail network.

So yes, Luca de Meo is rightly calling out the serious issues in his memo (and there are many), but it also feels like he’s already preparing to save his own face. Painting a dire picture now makes any improvement look like a win later, to me it totally reads as a classic CEO move focused on protecting your own position first. I get the sense that a few months in, even he didn’t anticipate the extent of the mess he’s dealing with.

I actually laughed when I read the part in the memo about Kering’s marketing teams and how it’s unclear what they’re doing or delivering despite their expenses. Hilarious and completely on point.

 

[PDFSD]

All of you have already said wise things. I think it basically boils down to short-term thinking versus long-term strategic planning (at which, for example, Hermès truly excels). When Kering had its big moment with Alessandro Michele’s Gucci, they enjoyed the success so much that they just kept pushing the same recipe onto the market. At some point, the consumer wants a somewhat new menu and they’re terrible at anticipating that moment. And clearly, they still haven't learned with Demna's appointment at Gucci (again more of the same!)

Add to that their huge exposure to wholesale (including Gucci and even Bottega) and all the negatives that come with it: limited control over pricing and markdowns, weakened brand image, and overexposure in their own retail network.

So yes, Luca de Meo is rightly calling out the serious issues in his memo (and there are many), but it also feels like he’s already preparing to save his own face. Painting a dire picture now makes any improvement look like a win later, to me it totally reads as a classic CEO move focused on protecting your own position first. I get the sense that a few months in, even he didn’t anticipate the extent of the mess he’s dealing with.

I actually laughed when I read the part in the memo about Kering’s marketing teams and how it’s unclear what they’re doing or delivering despite their expenses. Hilarious and completely on point.

Just want to ad that its not that Hermès truly excels at planning long term, its more that the inherited a core of products that they had to managed its access to it and we have to say its been a blessing of a luxury problem to have as a company , they learned to build other categories around it inorder to get access to hero products and they were slow by ways of not able make them fast enough sure.......... but there was a time that Hermes was overly depend on birkins and kelly´s before that scarfs etc now its more balanced sure.

But they learned as they got bigger as well, they will face new challenges with the new size the company became as well and over exposure/fatigue of hero products and management of amount of pre loved bags on the secondary market.

So far what makes them unique is the hand stitching and able to repair new & very old leather goods products so value retention is high still.

They still struggle to let beauty grow per example ..

I agree luca is preparing to safe his own face i agree with this allot lol he has to justify his big salary.
one thing i feel he does not have in depth ideas of what a good creative director means for a brand yet his taste comes from a straight man being in auto industry and sure like i predicted eh loves technology and advancements concepts all stuff very much part of car world.

i think he miss still the soft luxury skill in having a taste or eye for this, why i think he kept bellatini lady for a bit longer she is a good ear whisper but also clueless even from her merchising days but knows what to say to sound smart at the right time.

now she has to prove herself with her choice she fail this give luca more time to fix gucci again on his terms 100%

 

[jeanclaude]

one thing i feel he does not have in depth ideas of what a good creative director means for a brand yet his taste comes from a straight man being in auto industry and sure like i predicted eh loves technology and advancements concepts all stuff very much part of car world.

Remember when I said I could not understand why they hired a guy coming from the car industry?? Well, this was pretty obvious it was going to happen! 😅

Really...Is there common sense in nowadays fashion industry???

 

[PDFSD]

Remember when I said I could not understand why they hired a guy coming from the car industry?? Well, this was pretty obvious it was going to happen! 😅

Really...Is there common sense in nowadays fashion industry???

your right i remember ...i was hopeful but he's a zebra and those do not change their stripes lol

 

[PDFSD]

Remember when I said I could not understand why they hired a guy coming from the car industry?? Well, this was pretty obvious it was going to happen! 😅

Really...Is there common sense in nowadays fashion industry???

November 20, 2025
Jean-Frédéric Dufour, CEO of ROLEX, reminded the industry of something essential: watch brands must stay close to their customers and avoid becoming as impersonal as parts of the automotive sector.

 

[PierreGotha]

While LVMH remained calculated and focused, even when the luxury slowdown + pandemic happened;
Kering basically collapsed under the weight of its successes. By ignoring signals and having a lack of contingencies.

Hermes is a category on its own.

 

[PDFSD]

by Alexander Shapiro

Kering CEO Luca de Meo will set up a brand investment arm "House of Dreams". Kering already has 12 brand houses which are not performing and has made dozens of investments and disposals over the last 50 years without the need of a new investment vehicle. Kering was originally a wood trading and construction materials company that went into luxury fashion via acquisitions.

If Kering management can't improve the performance of their current 12 Houses and numerous real estate, hospitality and ESG investments why do they think they can improve their future cash flows with investments in "up-and-coming brands", geographies and new luxury experience trends? Gucci, BALENCIAGA and Saint Laurent continue to loose market share, margins and brand value but the management team thinks it has more than enough time, talent and cash to review, acquire and integrate new smaller brands. Claims that this effort will "de-risk" Kering from its failing Gucci business instead of focusing on fixing it is delusional.

How will turning elements of Kering into a Private Equity Style investment house similar to LVMH and L Catterton fix the current operational, brand and product challenges facing the group? One of the core elements of L Caterton was to look after the separate interests of the Arnault family and make investments outside the luxury focus of LVMH such as BIRKENSTOCK, The Honest Company, (RH) Restoration Hardware and Peloton Interactive. Kering needs to focus on better understanding the needs and preferences of their core luxury customers and more effectively developing and launching desirable new products with their in-house staff. Any distractions from this task are damaging.

This "House of Dreams" reminds me of the tremendous value destroying efforts from the automotive industry (especially de Meo's past employers Volkswagen and Renault Group) regarding mobility solutions, charging infrastructure, operating systems, the metaverse, electric and autonomous vehicle development. Why would Kering sell off its Beauty Division despite its superior growth and new product development opportunities to L'Oréal? Why is Kering still spending so much money and effort on costly celebrities, collaborations and sponsorships that benefit their "partners" without building in-house capabilities and long term product franchises?

Kering still has access to and credibility with wealthy shoppers and they should be focusing on expanding and nurturing this trust not finding new ways to leverage and annoy them.
Luxury Brand Turnarounds are a full time effort and should be based on consumers and products not strategy presentations and corporate development games.