Investing Talk #26: Kering Business

What is Kering

• Kering S.A. is a French multinational holding company in luxury goods. FourWeekMBA+3Wikipedia+3Kering+3

• Headquartered in Paris. Founded originally as a retail group (PPR), it has transformed into a luxury-focused conglomerate. Wikipedia+2FourWeekMBA+2

• Key people: François-Henri Pinault is Chairman & CEO (though leadership changes occur). Wikipedia+1

Brands & Product Portfolio

Kering owns a portfolio of luxury “houses” (brands) across fashion, leather goods, jewelry, eyewear, and beauty. Major brands include:

• Gucci Kering+2MarketScreener+2

• Saint Laurent (YSL) Wikipedia+2Kering+2

• Bottega Veneta Kering+2Kering+2

• Balenciaga Kering+1

• Alexander McQueen Kering+2Kering+2

• Brioni Kering+1

• Jewelry Houses: Boucheron, Pomellato, DoDo, Qeelin Kering+1

• Kering Eyewear — includes in-house production of eyewear for its own brands and others. Kering+2Kering+2

• Kering Beauté — a newer division focusing on beauty & fragrance. Kering+1

Financials & Key Figures (2024)

Business Model & Revenue Segments

• Multi-brand luxury model: Each “House” (brand) generally operates with creative independence, but Kering provides supporting functions (marketing, distribution, manufacturing, supply chain, retail operations) to leverage economies of scale. FourWeekMBA+2Kering+2

• Distribution channels: Directly-operated stores (including e-commerce) and wholesale. In 2024, Kering saw declines in both: directly-operated retail down ~13%, wholesale down more (≈22% in houses). Kering

• Complementary lines: Eyewear and beauty divisions are part of diversification; these tend to grow even when base apparel/leather goods face headwinds. Kering+2Kering+2

Strategy & Trends

• Focus on desirability, quality, and exclusivity: Reducing overexposure, tightening distribution, improving creative leadership. The aim is to protect brand equity. Kering

• Sustainability / Circularity: Kering invests in sustainability R&D, circular fashion models, resale & rental platforms, repair services, reducing waste, etc. Kering+1

• Investing in the supply chain: For example, in eyewear they’re acquiring lens producers and related assets to strengthen control. Reuters+1

• Beauté / fragrance as growth drivers: Growing newer business lines beyond core fashion/leather goods. Kering+1

Challenges & Recent Issues

• 2024 saw revenue decline, putting pressure on margins. Recurring operating margin dropped significantly. Kering

• Gucci, Kering’s largest contributor, has faced declining traffic / store sales in certain regions. Kering

• Macroeconomic headwinds: consumer spending slows, especially for luxury; geo-political risk; inflation; impacts on supply chain.

• Managing brand identity and creative consistency across multiple Houses.

Outlook

• Kering appears to be aiming for stabilization in 2025, focusing on operational discipline, cost control, sharpening brand strategies. Kering

• Growth in eyewear and beauty is expected to continue to be a strategic priority.

• Adjusting distribution strategy (making it more exclusive, pruning wholesale), improving retail experiences.

• Continued investment in sustainability and circular business models.