Kering: From Timber to Luxury Powerhouse (1962–2026)
Courtni WatkinsShare
Kering: From Timber to Luxury Powerhouse (1962–2026)
Kering stands today as one of the world’s most influential luxury conglomerates, a transformation that is as remarkable as it is instructive. Founded in 1962 as a timber trading company by François Pinault, Kering’s journey over six decades has been marked by bold acquisitions, strategic pivots, and a relentless focus on brand elevation. The group’s evolution from a diversified French industrial and retail conglomerate into a pure-play luxury powerhouse is a case study in corporate reinvention, operational discipline, and the challenges of sustaining growth in a volatile global luxury market.
This report provides a comprehensive analysis of Kering’s history, strategic milestones, and financial performance through 2026. It pays particular attention to the group’s flagship brands—Gucci and Yves Saint Laurent (YSL)—whose fortunes have shaped Kering’s trajectory and whose contributions remain central to the group’s profitability. The report also examines Kering’s recent challenges, including the 2024–2025 downturn, leadership transitions, and the group’s ongoing efforts to rebalance its portfolio and restore growth. Throughout, the analysis is grounded in detailed financial data, market context, and a critical assessment of Kering’s strategic decisions.
I. Corporate History: From Timber to Luxury (1962–2026)
1.1 Origins and Early Expansion (1962–1998)
Kering’s roots trace back to 1962, when François Pinault established Établissements Pinault in Brittany, France, as a timber trading business. The company grew rapidly through acquisitions in the timber and building materials sector, becoming a leading player in France by the 1980s. In 1988, Pinault S.A. was listed on the Paris Stock Exchange, marking the start of a new era of diversification.
The late 1980s and early 1990s saw the group expand aggressively into retail and distribution. Key acquisitions included Conforama (furniture, 1991), Printemps (department stores, 1992), La Redoute (mail-order, 1992), and Fnac (books and electronics, 1994). The group was renamed Pinault-Printemps-Redoute (PPR) in 1994, reflecting its broadened scope.
By the late 1990s, PPR had become a sprawling conglomerate, with interests spanning retail, industrial distribution, and financial services. However, as margins in these sectors came under pressure, the group’s leadership began to envision a future focused on high-value, differentiated brands.
1.2 The Luxury Pivot: Gucci and the First Wave of Acquisitions (1999–2005)
The pivotal moment in Kering’s history came in 1999, when PPR acquired a 42% stake in the Gucci Group for $3 billion, outmaneuvering rival LVMH in a dramatic takeover battle. This acquisition marked the group’s entry into luxury and set the stage for a series of transformative deals:
- 1999: Acquisition of Gucci (42%) and Yves Saint Laurent (YSL), including YSL Beauté.
- 2000: Acquisition of Boucheron (jewelry).
- 2001: Acquisition of Bottega Veneta (leather goods), Balenciaga (couture), and partnerships with Alexander McQueen and Stella McCartney.
These moves established PPR’s luxury division, with Gucci as its linchpin. Over the next several years, PPR increased its stake in Gucci, reaching 99.4% ownership by 2004. The group also began divesting lower-margin retail and industrial assets, signaling a deliberate shift toward luxury.
1.3 Diversification: Sport & Lifestyle and Second Luxury Wave (2005–2014)
From 2005, under François-Henri Pinault (appointed CEO in 2005), PPR pursued a dual strategy: expanding its luxury portfolio while diversifying into sport and lifestyle. Major moves included:
- 2007: Acquisition of Puma (sportswear), marking a foray into the “sport-lifestyle” segment.
- 2010–2011: Acquisitions of Cobra Golf and Volcom (surf/skate apparel).
- 2011–2014: Expansion into jewelry and watches with Pomellato, Qeelin, Sowind Group (Girard-Perregaux), and Ulysse Nardin.
While the sport and lifestyle division provided volume and diversification, luxury remained the group’s primary growth engine. Directly operated luxury stores expanded rapidly, and the group continued to shed non-core retail assets.
1.4 Becoming Kering: Pure-Play Luxury (2013–2018)
In 2013, PPR rebranded as Kering, adopting a new owl logo and a mission centered on luxury. The group accelerated its exit from non-luxury businesses:
- 2013–2014: Sale of Fnac, La Redoute, and other retail assets.
- 2018: Spin-off of Puma (70% distributed to shareholders), completing the transition to a pure luxury group.
Kering’s portfolio now centered on fashion, leather goods, jewelry, and eyewear, with Gucci, YSL, Bottega Veneta, Balenciaga, and Alexander McQueen as its flagship brands.
1.5 Recent Developments: Beauty, Eyewear, and Strategic Rebalancing (2018–2026)
From 2018 onward, Kering focused on deepening its luxury expertise and expanding into adjacent categories:
- 2014–2024: Creation and expansion of Kering Eyewear, including acquisitions of Lindberg (2021) and Maui Jim (2022).
- 2023: Launch of Kering Beauté and acquisition of Creed (fragrance), as well as a 30% stake in Valentino.
- 2025: Sale of Kering Beauté (including Creed) to L’Oréal, signaling a strategic retreat from in-house beauty.
- 2025: Leadership transition—Luca de Meo appointed CEO, with François-Henri Pinault remaining as Chairman.
These moves reflect both ambition and adaptation, as Kering seeks to balance growth, profitability, and portfolio coherence in a challenging market.
II. Major Acquisitions, Divestitures, and Strategic Shifts
2.1 Key Acquisitions and Divestitures by Year
The table below summarizes Kering’s most significant acquisitions and divestitures from 1999 to 2026:
| Year | Acquisition/Divestiture | Description |
|---|---|---|
| 1999 | Gucci (42%), YSL | Entry into luxury; cornerstone deal |
| 2000 | Boucheron | Expansion into jewelry |
| 2001 | Bottega Veneta, Balenciaga, Alexander McQueen, Stella McCartney | Fashion/luxury consolidation |
| 2007 | Puma | Sport & lifestyle diversification |
| 2011 | Brioni, Sowind Group | Menswear, watches |
| 2012 | Pomellato, Qeelin | Jewelry |
| 2013 | Christopher Kane, Richard Ginori | Fashion, porcelain |
| 2014 | Ulysse Nardin | Watches |
| 2018 | Puma (spin-off), Stella McCartney (divestiture) | Exit from sport/lifestyle, focus on luxury |
| 2021 | Lindberg (eyewear) | Eyewear expansion |
| 2022 | Maui Jim (eyewear), Sowind Group (divestiture) | Eyewear growth, exit from watches |
| 2023 | Creed (fragrance), 30% of Valentino | Beauty, couture investment |
| 2025 | Kering Beauté (sale to L’Oréal) | Strategic retreat from in-house beauty |
Each of these moves reflects Kering’s evolving strategy: from diversification to focused luxury, from external licensing to in-house control (eyewear, beauty), and from volume to value.
2.2 Strategic Shifts: From Conglomerate to Focused Luxury
Kering’s transformation has unfolded in distinct waves:
- First Wave (1999–2005): Aggressive luxury acquisitions, led by Gucci, YSL, and complementary brands. Divestiture of lower-margin retail and industrial assets.
- Second Wave (2005–2011): Diversification into sport and lifestyle (Puma, Volcom), alongside continued luxury expansion.
- Third Wave (2012–2014): Focus on jewelry, watches, and heritage brands. Selective divestitures of operationally misaligned assets.
- Consolidation (2015–2022): Exit from sport/lifestyle and watches. Internalization of eyewear. Expansion of directly operated luxury stores.
- Selective Expansion and Experimentation (2021–2026): Entry into beauty (Kering Beauté, Creed), strategic investment in Valentino, and subsequent retreat from beauty via sale to L’Oréal.
This disciplined approach has allowed Kering to build a portfolio of high-margin, globally recognized brands, while maintaining operational flexibility and financial resilience.
III. Leadership, Governance, and Shareholding
3.1 Founders, CEOs, and Board Evolution
- François Pinault: Founder (1962), architect of the group’s initial expansion and luxury pivot.
- François-Henri Pinault: CEO (2005–2025), led the transformation into a pure luxury group, oversaw major acquisitions, and drove operational discipline.
- Luca de Meo: CEO (from September 2025), former automotive executive (Renault, Fiat, Audi), tasked with operational turnaround and strategic renewal.
The 2025 governance change—separating the roles of Chairman (Pinault) and CEO (de Meo)—marks a significant shift, intended to accelerate decision-making and inject fresh operational rigor at a time of financial and strategic challenge.
3.2 Shareholding Structure
As of December 31, 2024, Kering’s share capital was held as follows:
- Artémis (Pinault family holding): 42.3%
- Institutional investors: 52.6% (with 22.9% North America, 11.1% UK, 6% France, 6.5% continental Europe, 3% Asia-Pacific)
- Individual shareholders: 4.2%
- Employee/executive officers: 0.2%
- Treasury shares: 0.7%
The Pinault family retains effective control, with 59% of voting rights, ensuring strategic continuity even as operational leadership transitions to an external CEO.
IV. Brand Portfolio and House-Level Histories
4.1 Overview of Kering’s Brand Portfolio (2026)
Kering’s portfolio as of 2026 includes:
- Fashion & Leather Goods: Gucci, Yves Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni
- Jewelry: Boucheron, Pomellato, DoDo, Qeelin
- Porcelain: Ginori 1735
- Eyewear: Kering Eyewear (including Lindberg, Maui Jim)
- Beauty: (Creed and Kering Beauté sold to L’Oréal in 2026)
- Strategic Investments: 30% stake in Valentino (option to acquire 100% by 2029)
Each house operates with creative and operational autonomy, while benefiting from Kering’s centralized expertise in retail, supply chain, and sustainability.
4.2 Gucci: The Flagship
Founded in Florence in 1921, Gucci is Kering’s largest and most iconic brand. Acquired in 1999, Gucci has undergone multiple creative reinventions, most notably under Alessandro Michele (2015–2022), whose maximalist vision drove explosive growth, and more recently under Sabato De Sarno (2023–2025) and Demna (from 2025).
Gucci’s revenue peaked at over €10 billion in 2022, but the brand has faced significant headwinds since 2023, with revenue and profitability declining sharply amid creative transitions and market normalization.
4.3 Yves Saint Laurent (YSL)
Acquired in 1999, YSL has steadily grown into Kering’s second-largest brand. Under the leadership of Francesca Bellettini (CEO since 2013), YSL has achieved strong revenue growth, crossing the €2 billion mark in 2019 and maintaining high operating margins. The brand is known for its Parisian heritage, sharp tailoring, and iconic leather goods.
4.4 Bottega Veneta
Acquired in 2001, Bottega Veneta is renowned for its understated luxury and artisanal leather craftsmanship. The brand has experienced a renaissance in recent years, with revenue surpassing €1.7 billion in 2024 and strong performance in North America and Asia-Pacific.
4.5 Other Houses
- Balenciaga: Acquired in 2001, transformed into a disruptive fashion house under Demna (2015–2025), now led by Pierpaolo Piccioli (from July 2025).
- Alexander McQueen: Acquired in 2001, known for avant-garde design; recent leadership transitions.
- Brioni: Acquired in 2011, Italian menswear.
- Jewelry Houses: Boucheron, Pomellato, DoDo, Qeelin—each with distinct heritage and market positioning.
4.6 Kering Eyewear and Beauté
- Kering Eyewear: Created in 2014, now the world’s second-largest luxury eyewear maker, with revenue of nearly €1.6 billion in 2024. Key brands include Lindberg, Maui Jim, and licenses for Gucci, YSL, Balenciaga, and others.
- Kering Beauté: Launched in 2023, acquired Creed (fragrance), but sold to L’Oréal in 2026 as part of a strategic alliance.
V. Financial Performance (2018–2026): Group and Brand-Level Analysis
5.1 Group-Level Financials (2018–2026)
The following table summarizes Kering’s key financial metrics from 2018 to 2026 (actuals and consensus estimates):
| Year | Revenue (€m) | Rec. Op. Income (€m) | Net Income (€m) | Rec. Op. Margin | Dividend (€) | Net Debt (€m) |
|---|---|---|---|---|---|---|
| 2018 | 13,665 | 3,943 | 3,714 | 28.9% | 8.00 | 168 |
| 2019 | 15,883 | 4,778 | 3,211 | 30.1% | 10.50 | 1,000 |
| 2020 | 13,100 | 3,136 | 1,972 | 23.9% | 8.00 | 2,000 |
| 2021 | 17,645 | 5,017 | 3,176 | 28.4% | 12.00 | 2,300 |
| 2022 | 20,351 | 5,589 | 3,614 | 27.5% | 13.00 | 2,300 |
| 2023 | 19,566 | 4,746 | 2,983 | 24.3% | 14.00 | 8,500 |
| 2024 | 17,194 | 2,554 | 1,133 | 14.9% | 6.00 | 10,500 |
| 2025E | 14,740–15,100 | 1,700–2,000 | 800–1,000 | 11–13% | 4.00–6.00 | 10,000+ |
| 2026E | 15,100–16,000 | 2,000–2,400 | 1,000–1,200 | 13–15% | 4.00–6.00 | 9,000–10,000 |
Key trends:
- Revenue peaked at €20.4 billion in 2022, then declined sharply in 2023–2024 amid market normalization and Gucci’s downturn.
- Recurring operating income and margin fell precipitously in 2024 (–46% YoY), reflecting negative operational leverage.
- Net debt surged from near-zero in 2021 to over €10.5 billion by end-2024, driven by acquisitions (Creed, Valentino stake) and real estate investments.
- Dividend was cut in 2024 to €6 per share (from €14 in 2023), reflecting lower earnings and a focus on balance sheet discipline.
5.2 Brand-Level Financials: Gucci and YSL (2018–2026)
Gucci: Revenue and Operating Income (2018–2026)
| Year | Revenue (€m) | Rec. Op. Income (€m) | Op. Margin |
|---|---|---|---|
| 2018 | 8,285 | 3,275 | 39.5% |
| 2019 | 9,628 | 3,948 | 41.0% |
| 2020 | 7,440 | 2,369 | 31.8% |
| 2021 | 9,731 | 3,715 | 38.2% |
| 2022 | 10,487 | 3,732 | 35.6% |
| 2023 | 9,873 | 3,264 | 33.1% |
| 2024 | 7,650 | 1,605 | 21.0% |
| 2025E | 6,000–6,500 | 1,000–1,200 | 16–18% |
| 2026E | 6,500–7,000 | 1,200–1,400 | 18–20% |
Analysis:
- Gucci’s revenue peaked in 2022, then declined 6% in 2023 and a dramatic 23% in 2024, returning to 2020 (pandemic) levels.
- Recurring operating income fell by more than half in 2024, with margin compressing to 21% (from 33% in 2023 and 35–41% in prior years).
- Gucci’s share of group recurring operating income remained above 60% through 2024, underscoring Kering’s dependence on the brand.
Yves Saint Laurent (YSL): Revenue and Operating Income (2018–2026)
| Year | Revenue (€m) | Rec. Op. Income (€m) | Op. Margin |
|---|---|---|---|
| 2018 | 1,744 | 459 | 26.3% |
| 2019 | 2,049 | 497 | 24.2% |
| 2020 | 1,744 | 374 | 21.4% |
| 2021 | 2,521 | 715 | 28.4% |
| 2022 | 3,300 | 1,019 | 30.9% |
| 2023 | 3,179 | 969 | 30.5% |
| 2024 | 2,881 | 593 | 20.6% |
| 2025E | 2,700–2,900 | 500–600 | 18–21% |
| 2026E | 2,900–3,100 | 600–700 | 20–22% |
Analysis:
- YSL’s revenue and profit grew strongly through 2022, then declined 9% in 2024, with operating margin falling to 20.6%.
- Despite the downturn, YSL remains Kering’s second-largest profit contributor, with a more resilient performance than Gucci.
Brand Contribution to Group Profit (2023–2024)
| Brand | 2023 Rec. Op. Income (€m) | % of Group | 2024 Rec. Op. Income (€m) | % of Group |
|---|---|---|---|---|
| Gucci | 3,264 | 68.8% | 1,605 | 62.9% |
| YSL | 969 | 20.4% | 593 | 23.2% |
| Bottega Veneta | 312 | 6.6% | 255 | 10.0% |
| Other Houses | 212 | 4.5% | (9) | –0.4% |
| Eyewear/Corp. | (7) | –0.1% | 112 | 4.4% |
| Total | 4,746 | 100% | 2,554 | 100% |
Key Takeaways:
- Gucci and YSL together accounted for over 85% of group recurring operating income in 2023–2024.
- Gucci’s profit contribution, while still dominant, declined in absolute and relative terms in 2024.
- Bottega Veneta and Eyewear provided some offset, but Other Houses swung to a loss.
VI. Methodology for Brand-Level Profit Attribution
Kering reports recurring operating income by brand, allowing for a direct assessment of each house’s profitability. The group’s definition of recurring operating income excludes non-recurring items, providing a consistent measure of underlying performance.
To estimate brand contribution to group profit:
- Use reported recurring operating income for each brand.
- Calculate each brand’s share of total group recurring operating income.
- Adjust for inter-segment eliminations and corporate costs as reported.
This approach provides a clear picture of the relative weight of Gucci, YSL, and other brands in Kering’s profit pool.
VII. Recent Developments (2024–2026): Turnaround, Leadership, and Strategic Alliances
7.1 The 2024–2025 Downturn: Causes and Consequences
Kering’s financial performance deteriorated sharply in 2024–2025:
- Revenue: Down 12% in 2024, with Gucci revenue plunging 23% and recurring operating income halved.
- Profitability: Group recurring operating margin fell to 14.9% in 2024 (from 24.3% in 2023).
- Net Income: Collapsed to €1.1 billion in 2024 (–62% YoY).
- Net Debt: Surged to €10.5 billion by end-2024, reflecting acquisition spending and lower cash generation.
Drivers:
- Weak consumer demand in Western markets, especially for Gucci.
- Creative transitions and lack of product excitement at Gucci.
- Strategic reduction of wholesale channels to enhance exclusivity, leading to lower volumes.
- Continued investments in marketing, store refurbishments, and organizational restructuring.
7.2 Leadership Changes and Governance Reform
- 2023–2024: Major management reshuffles at Gucci, YSL, Balenciaga, and Bottega Veneta. Sabato De Sarno’s short-lived tenure as Gucci Creative Director ended in early 2025, replaced by Demna (formerly of Balenciaga).
- 2025: Appointment of Luca de Meo as CEO (from September 15), with François-Henri Pinault remaining as Chairman. This marks the first time in two decades that operational control is separated from family leadership.
- Strategic Mandate: De Meo is tasked with restoring operational discipline, accelerating cost-cutting, optimizing the retail network (including potential store closures), and reducing debt.
7.3 Strategic Alliances and Portfolio Moves
- 2023: Acquisition of Creed (fragrance) and 30% stake in Valentino, with an option to acquire 100% by 2029.
- 2025: Sale of Kering Beauté (including Creed) to L’Oréal for €4 billion, alongside a long-term partnership in beauty and wellness. This move reflects a strategic retreat from in-house beauty, favoring alliances with industry leaders.
- Eyewear: Continued expansion, with Kering Eyewear now contributing nearly €1.6 billion in revenue and €277 million in operating profit in 2024.
7.4 Legal, Regulatory, and Reputational Issues
- 2025: The European Commission fined Gucci €119.7 million for anticompetitive resale price maintenance practices (2015–2023), as part of a broader crackdown on luxury brands. Kering provisioned for the fine in its 2025 accounts and cooperated with authorities.
- Sustainability: Kering remains a leader in ESG, achieving a “Triple A” CDP score in 2024 and pioneering the Environmental Profit & Loss (EP&L) tool to measure and manage its environmental footprint.
VIII. Market Context and Competitive Positioning
8.1 The Luxury Landscape: LVMH, Richemont, Hermès, and Kering
Kering is the world’s third-largest luxury group by revenue, behind LVMH and Richemont, and ahead of Hermès in overall size but not in profitability or brand equity. The group’s fortunes are closely tied to the performance of its megabrands, especially Gucci.
Competitive Dynamics:
- LVMH: Diversified across fashion, leather goods, jewelry, watches, wines, and spirits. Flagship brands (Louis Vuitton, Dior) have maintained growth and high margins through creative consistency and global scale.
- Richemont: Focused on jewelry and watches (Cartier, Van Cleef & Arpels), with a growing presence in fashion (Chloé).
- Hermès: Singular focus on ultra-high-end craftsmanship, with industry-leading margins and brand desirability.
Kering’s challenge is to restore Gucci’s momentum, reduce overreliance on a single brand, and leverage its expertise in brand building, retail, and sustainability.
8.2 Distribution, Retail, and Channel Mix
Kering has prioritized directly operated retail (including e-commerce) as its primary channel, accounting for over 90% of Gucci and YSL revenue. The group has deliberately reduced wholesale exposure to enhance brand exclusivity and control pricing.
- 2024: Retail sales fell 13% on a comparable basis, reflecting lower store traffic and adverse market conditions.
- Wholesale: Down 22% in 2024, as the group continued to rationalize third-party distribution.
Kering operates 1,813 retail locations worldwide as of 2024, with a focus on flagship stores in key luxury markets. The group is reviewing its retail footprint, with potential store closures to optimize profitability.
IX. Sustainability, ESG Initiatives, and EP&L Impact
9.1 Environmental Profit & Loss (EP&L) and Sustainability Leadership
Kering was among the first luxury groups to implement an EP&L tool, quantifying its environmental footprint across the value chain. The EP&L covers greenhouse gas emissions, air and water pollution, waste, land use, and water consumption, translating impacts into monetary terms.
Key Achievements:
- Reduced EP&L intensity by 40% by 2021 (target originally set for 2025).
- Committed to net-zero greenhouse gas emissions across the value chain by 2050, with SBTi-validated targets.
- Achieved “Triple A” CDP score in 2024, the only luxury group to do so.
Kering’s approach integrates sustainability into sourcing, manufacturing, and product development, with each house responsible for its own action plan.
9.2 Social and Governance Initiatives
- Women in Motion: Program to highlight women’s contributions to cinema and culture.
- Parental Policy: Minimum 14 weeks’ paid leave for all employees worldwide.
- Diversity and Inclusion: Ongoing efforts to foster a diverse and inclusive workplace.
Kering’s sustainability leadership is both a competitive differentiator and a response to increasing regulatory and stakeholder expectations.
X. Kering Eyewear and Kering Beauté: Financial Impact
10.1 Kering Eyewear
- 2024 Revenue: Nearly €1.6 billion (+6% comparable), with operating profit of €277 million (17.5% margin).
- Growth Drivers: Integration of Maui Jim and Lindberg, strong performance in Europe and Asia-Pacific, and expansion of licensed brands (Gucci, YSL, Cartier).
- Strategic Importance: Eyewear is now a core growth engine, providing diversification and operational synergies.
10.2 Kering Beauté
- 2024 Revenue: €323 million, primarily from Creed (acquired June 2023).
- 2025–2026: Sale of Kering Beauté (including Creed) to L’Oréal for €4 billion, as part of a broader alliance in beauty and wellness.
- Rationale: Strategic retreat from in-house beauty, favoring partnerships with industry leaders to maximize brand reach and profitability.
XI. Legal, Regulatory, and Reputational Issues
11.1 EU Antitrust Fine (2025)
- Gucci fined €119.7 million for resale price maintenance (2015–2023), alongside fines for Chloé and Loewe.
- Nature of Infringement: Restricting independent retailers’ ability to set prices, imposing maximum discounts, and controlling sales periods.
- Resolution: Kering cooperated with the European Commission, provisioned for the fine, and pledged to strengthen compliance.
11.2 Other Regulatory and Reputational Risks
- Supply Chain Scrutiny: Ongoing investigations into labor practices and environmental impact.
- Data Security: Recent breaches at luxury brands have heightened regulatory attention.
Kering’s proactive approach to compliance and transparency is critical to maintaining stakeholder trust and mitigating legal risks.
XII. Analyst Consensus, Valuation, and Shareholder Returns
12.1 Analyst Ratings and Consensus Forecasts
- 2025–2026 Outlook: Analysts expect Kering’s revenue to stabilize around €15–16 billion in 2026, with EBIT margins recovering to 13–15% as operational improvements take hold.
- Valuation: Kering’s share price has declined sharply since its 2021 peak, reflecting earnings pressure, rising debt, and uncertainty over Gucci’s turnaround.
- Dividend: Cut to €6 per share in 2024, with further reductions possible if profitability remains subdued.
12.2 Shareholder Structure and Returns
- Artémis (Pinault family): 42.3% ownership, 59% voting rights.
- Institutional Investors: 52.6%, with significant North American and UK presence.
- Dividend Yield: 4.9% in 2024, reflecting lower payout and share price decline.
Kering’s ability to restore growth, reduce debt, and rebalance its profit pool will be critical to future shareholder returns.
XIII. Outlook and Strategic Priorities (2026 and Beyond)
13.1 Turnaround Imperatives
Under CEO Luca de Meo, Kering’s immediate priorities include:
- Gucci Rehabilitation: Restore product excitement, clarify creative direction, and rebuild momentum in core markets (North America, Europe, Asia).
- Operational Discipline: Accelerate cost-cutting, optimize retail network (including potential store closures), and improve working capital management.
- Debt Reduction: Target over €1 billion in debt reduction through asset disposals, real estate sales, and improved cash generation.
- Portfolio Rebalancing: Reduce overreliance on Gucci, accelerate growth at YSL, Bottega Veneta, Eyewear, and Jewelry Houses.
13.2 Strategic Opportunities
- Valentino Option: Potential to acquire 100% of Valentino by 2029, providing a new growth engine.
- Eyewear Expansion: Continue to leverage Kering Eyewear’s scale and brand portfolio.
- Sustainability Leadership: Maintain and enhance ESG credentials, integrating double materiality and ecosystem valuation into decision-making.
- Digital and Omnichannel: Invest in customer insight tools, e-commerce, and omnichannel experiences to engage high-value clients and Gen Z audiences.
13.3 Risks and Challenges
- Market Volatility: Luxury demand remains sensitive to macroeconomic headwinds, especially in China and the US.
- Brand Execution: Success depends on creative consistency, product excellence, and effective client engagement.
- Competitive Pressure: LVMH, Hermès, and Richemont continue to set the pace in brand desirability and profitability.
- Regulatory Scrutiny: Ongoing legal and compliance risks require vigilance and transparency.
XIV. Tables and Charts
14.1 Kering Group: Revenue and Operating Income by Brand (2022–2024)
| Brand | 2022 Revenue (€m) | 2023 Revenue (€m) | 2024 Revenue (€m) | 2022 Op. Income (€m) | 2023 Op. Income (€m) | 2024 Op. Income (€m) |
|---|---|---|---|---|---|---|
| Gucci | 10,487 | 9,873 | 7,650 | 3,732 | 3,264 | 1,605 |
| YSL | 3,300 | 3,179 | 2,881 | 1,019 | 969 | 593 |
| Bottega Veneta | 1,740 | 1,645 | 1,713 | 366 | 312 | 255 |
| Other Houses | 3,874 | 3,514 | 3,221 | 558 | 212 | (9) |
| Eyewear/Corp. | 1,139 | 1,568 | 1,941 | (88) | (7) | 112 |
| Total | 20,351 | 19,566 | 17,194 | 5,589 | 4,746 | 2,554 |
Source: Kering annual reports, press releases
14.2 Gucci and YSL: Share of Group Recurring Operating Income (2022–2024)
| Year | Gucci (%) | YSL (%) | Combined (%) |
|---|---|---|---|
| 2022 | 66.8 | 18.2 | 85.0 |
| 2023 | 68.8 | 20.4 | 89.2 |
| 2024 | 62.9 | 23.2 | 86.1 |
Interpretation: Gucci and YSL together consistently account for over 85% of Kering’s group profit, underscoring the group’s dependence on its two flagship brands.
XV. Anywho
Kering’s journey from a timber trading business to a global luxury powerhouse is a testament to strategic vision, operational discipline, and the power of brand equity. The group’s transformation has been marked by bold acquisitions, disciplined divestitures, and a relentless focus on high-margin, globally recognized brands.
Yet, the challenges of 2024–2025 have exposed the risks of overreliance on a single megabrand and the volatility inherent in the luxury sector. Gucci’s downturn, coupled with rising debt and market normalization, has forced Kering to confront the limits of its growth model and to embark on a new phase of operational and strategic renewal.
Under new CEO Luca de Meo, Kering faces a pivotal test: can it restore Gucci’s momentum, rebalance its profit pool, and leverage its strengths in brand building, retail, and sustainability to regain its place among the world’s most admired luxury groups? The answer will depend on the group’s ability to execute with discipline, creativity, and agility in an increasingly complex and competitive market.
As Kering enters its seventh decade, the lessons of its past—boldness, adaptability, and a commitment to excellence—will be more important than ever. The group’s future will be shaped not only by its iconic brands but by its capacity to innovate, to lead on sustainability, and to deliver value for shareholders, employees, and society at large.