When Legacy Is Not Enough: Kering’s Turnaround Strategy

Why Luxury Groups are replacing dynasties with strategists?

Kering— legacy carved in stone, but now under pressure

In the luxury world, heritage is currency — until it isn’t. François-Henri Pinault stepping down as CEO of Kering marks more than a leadership shuffle. It’s an admission: legacy alone can’t shield a luxury group from decline. Even empires built on craftsmanship and creativity must answer to the cold logic of quarterly results.

The Numbers Don’t Lie

In 2022, Kering posted annual revenue of €20.35 billion, buoyed by the stratospheric rise of Gucci under Alessandro Michele. Fast forward to 2024, and revenue has slipped to €17.19 billion — a 12% year-over-year decline.

Meanwhile, its rival LVMH continues to accelerate. In 2023, it passed €86 billion, generating more than three times Kering’s revenue, and deepening its dominance across fashion, jewelry, beauty, and hospitality.

The gap is no longer just financial — it’s cultural. LVMH is expanding. Kering is recalibrating.

The Fall of the Crown Jewel

Gucci, once the crown jewel of Kering’s portfolio, is now its greatest liability. Revenue dropped from €10.5 billion in 2022 to €7.7 billion in 2024. Michele’s maximalist magic had worn off, and under Sabato De Sarno, the brand’s new vision has yet to land with scale or consistency.

Balenciaga faced reputational damage. Saint Laurent, while consistent, hasn’t scaled to fill the Gucci gap. Valentino, a recent acquisition, has yet to generate returns.

Kering is no longer chasing LVMH. One is consolidating its lead. The other is looking for a reset.

From Vision to Restructuring: The End of the Pinault Era

François-Henri Pinault doesn’t leave behind failure — he leaves behind a legacy of bold bets. Under his leadership, Kering shed its retail past, elevated Gucci into a global powerhouse, and transformed Saint Laurent and Balenciaga into cultural forces.

He empowered creatives. He rebranded the group around high fashion. And for a time, it worked.

“We’ve always believed that creativity is our strongest currency,” Pinault once said.

Still, in recent years, creativity lacked the anchor of direction — and financial pressure mounted. The next chapter calls for operational clarity.

Luca de Meo: The Operator-in-Chief

Kering’s appointment of Luca de Meo, former CEO of Renault, is more than a leadership change. It’s a strategic correction — from founder-led vision to outsider-led execution.

De Meo brings no fashion pedigree. What he brings is discipline. His playbook is built on turnarounds, cost control, and brand architecture.

He doesn’t come with a couture résumé. He comes with a turnaround playbook. — The CFO Diary

The Roadmap to Revival Is Daunting and Urgent:

• Address €10B in debt
• Reassess underperforming assets like Balenciaga and Valentino
• Restore commercial momentum at Gucci
• Streamline operations across sourcing, retail, and reporting
• Reconnect brand storytelling with measurable growth

The Rise of Meritocracy in Luxury

Kering’s pivot isn’t happening in isolation.

When Chanel appointed Leena Nair — a former Unilever HR executive — as global CEO in 2022, it raised eyebrows across the fashion world. But under her guidance, Chanel doubled down on structure, inclusion, and long-term brand stewardship. At LVMH, Antonio Belloni, formerly of Procter & Gamble, has helped engineer the group’s scaling machine — proof that even heritage houses benefit from outside systems thinking.

Luxury is no longer run by visionaries alone. It’s being managed by operators.

A Strategic Crossroads for Luxury

Kering’s restructuring comes at a time when the broader luxury sector is cooling. After years of post-pandemic boom, consumer demand is softening across markets. Even LVMH and Hermès reported slower growth in 2024. In that context, this isn’t just Kering’s story. It’s a case study in how legacy players must evolve — or risk obsolescence.

The CFO Diary Take

Kering’s €10 billion debt is more than a number. It’s a reflection of what happens when creative experimentation isn’t backed by execution.

De Meo’s appointment signals a cultural reset: from instinct to structure, from fantasy to framework, from charisma to control.

And while some may still ask, “Can outsiders protect the soul of luxury?” — the real question is this:

Can luxury — as it stands — afford to ignore them?

Explore more at www.thecfodiary.com (launching soon)

Source: Kering Full-Year 2022 Financial Report

Source: Kering FY 2024 Press Release via Business of Fashion