Kering, a major luxury group, is at a crossroads. Its CEO Luca DeMeo has launched a comprehensive plan, 'Recon Kering,' to revitalize the company, which has been struggling with declining sales, particularly at Gucci, and significant debt. This episode dissects the challenges Kering faces and analyzes the strategies outlined in Recon Kering, including addressing debt, optimizing retail footprint, and new ventures in high-end beauty and wellness.
Key takeaways
Kering's debt, standing at €8 billion, is being addressed through strategic maneuvers like pausing the Valentino acquisition and the L'Oréal partnership for Kering Beauty, which will inject €4 billion.
Gucci's sales have halved in the last four years, dropping 8% in the last quarter, largely due to an over-reliance on the brand and expanding SKU count to an unsustainable level.
Kering plans to close approximately 250 stores across its brands by 2030, with 125 of those being Gucci stores, to optimize retail footprint and increase efficiency.
The 'Recon Kering' plan includes a long-term licensing agreement with L'Oréal for beauty product development and distribution, while Kering will launch its own high-end beauty and wellness arm focusing on luxury experiences and subscription services.
Kering aims to move beyond the 'vanilla ice cream' paradox, where a globally popular brand like Gucci struggles to maintain a unique identity while simultaneously driving mass sales, by redefining messaging and focusing on targeted customer engagement.
Kering's new CEO, Luca de Meo, laid out a sprawling plan to turn the company around. After several years of slow but notable sales declines, particularly at its crown jewel, Gucci, Kering needs a new strategy. On the Glossy Podcast, senior fashion reporter Danny Parisi and international reporter Zofia Zwieglinska discuss what was wrong with Kering's previous strategy, what de Meo's new plan entails, and how likely it is to succeed.
What does this episode say about founder & leadership?
Kering's debt, standing at €8 billion, is being addressed through strategic maneuvers like pausing the Valentino acquisition and the L'Oréal partnership for Kering Beauty, which will inject €4 billion.
What does this episode say about finance & fundraising?
Gucci's sales have halved in the last four years, dropping 8% in the last quarter, largely due to an over-reliance on the brand and expanding SKU count to an unsustainable level.
What does this episode say about retail & omnichannel?
Kering plans to close approximately 250 stores across its brands by 2030, with 125 of those being Gucci stores, to optimize retail footprint and increase efficiency.
What does this episode say about brand & content?
The 'Recon Kering' plan includes a long-term licensing agreement with L'Oréal for beauty product development and distribution, while Kering will launch its own high-end beauty and wellness arm focusing on luxury experiences and subscription services.
What does this episode say about founder & leadership?
Kering aims to move beyond the 'vanilla ice cream' paradox, where a globally popular brand like Gucci struggles to maintain a unique identity while simultaneously driving mass sales, by redefining messaging and focusing on targeted customer engagement.
