In February 2025, François-Henri Pinault stood before analysts and delivered the kind of earnings report that luxury conglomerates are not supposed to produce: revenue down 12% to €17.2 billion, recurring operating income cratered 46% to €2.6 billion, net income slashed 62% to €1.1 billion. Kering's operating margin — once a sector-leading 24.3% — had contracted to 14.9% in a single year. The company's share price, which had peaked above €700 in late 2021, was trading below €230. And yet what Pinault said next was not a mea culpa but a declaration of inflection. "We are confident that we have driven Kering to a point of stabilization," he told investors, "from which we will gradually resume our growth trajectory." It was, depending on your vantage point, either the delusional reassurance of a family patriarch whose flagship brand had lost its way, or the steely conviction of a man who had remade this company at least three times before — and might just be capable of doing it again.
The number that haunted the room was not the top line. It was Gucci's. Revenue at Kering's crown jewel had fallen 23% to €7.7 billion, with a 24% plunge in Q4 alone. More ominously, just days before the results were published, Kering had parted ways with Sabato De Sarno, the creative director hired in early 2023 to revive the brand, after less than two years. Gucci was rudderless again — its third creative transition in a decade, each one more urgent than the last. The luxury industry, which had spent the post-pandemic years minting money from aspirational Chinese consumers and the global appetite for logo-laden self-expression, was now punishing the companies most exposed to that trade. And nobody was more exposed than Kering.
By the Numbers
Kering at a Glance (FY2024)
€17.2BRevenue (down 12% YoY)
€2.6BRecurring operating income (down 46%)
14.9%Operating margin (vs. 24.3% in 2023)
€7.7BGucci revenue (down 23%)
€1.1BNet income attributable to group
49,000+Employees worldwide
~€30BMarket capitalization (early 2025)
42.2%Pinault family stake (Artémis)
The Timber Trader's Grandson
To understand Kering's present crisis, you have to begin not with a fashion house but with a sawmill. François Pinault — the patriarch, not the son — grew up in Les Champs-Géraux, a village of a few hundred people in Brittany. He left school at sixteen after being bullied for his rural poverty, launched a timber trading business in 1963 called Établissements Pinault, and spent the next three decades building it into one of France's most audacious conglomerates through a series of acquisitions that treated corporate distress the way a predator treats wounded prey. By the 1990s, the renamed Pinault-Printemps-Redoute — PPR — owned the FNAC electronics chain, the Printemps department store, La Redoute mail-order business, the furniture retailer Conforama, and Christie's auction house. François Pinault was a self-made billionaire in a country that worships its grandes écoles graduates, a man who had never attended university operating in a world defined by them. His fortune, estimated by Forbes at roughly $25 billion by the late 2010s, grew from a single conviction: buy assets that others undervalue, apply operational discipline, and wait.
François-Henri Pinault — the son, the inheritor, the one who would remake the empire — is a different animal. Educated at HEC Paris, the French equivalent of Harvard Business School, he entered the family business in his twenties, worked his way through the timber division, ran FNAC, and took over as CEO of PPR in 2005 at age forty-three, facing a company saddled with €4.5 billion in debt and a luxury portfolio that was still more sideshow than strategy. Where his father was an accumulator — buying widely, holding loosely — the son would become a curator. His central insight, developed over a decade of observation, was that the highest-margin, most defensible business available to a conglomerate was not retail distribution, not consumer electronics, not mail order, but the manufacture and sale of desire itself. For more on the Pinault dynasty's remarkable trajectory from Breton timber to global luxury, Mervin S. Cohen's
The Life and Legacy of François Pinault traces the full arc of this improbable reinvention.
The decision to pivot PPR into a pure luxury group was not obvious. In the early 2000s, the conglomerate derived the majority of its revenue from retail — FNAC alone generated billions. Luxury was a promising but volatile category dominated by a single competitor, LVMH, whose chairman
Bernard Arnault had spent the 1980s and 1990s assembling the largest collection of prestige brands on earth. Pinault père had entered the luxury game almost by accident, acquiring a 40% stake in Gucci Group in 1999 as a defensive maneuver against Arnault, who had been accumulating Gucci shares in what many believed was a hostile takeover attempt. The battle for Gucci — conducted through Dutch courts, Florentine boardrooms, and the business pages of every European newspaper — was the origin myth of the Kering we know today. François Pinault won. LVMH was forced to sell its Gucci stake. And the Pinault family found itself the custodian of not just Gucci, but Yves Saint Laurent, Boucheron, Bottega Veneta, Balenciaga, and Alexander McQueen — all of which had been folded into Gucci Group by Tom Ford and Domenico De Sole in the late 1990s.
The Great Divestiture
François-Henri Pinault's tenure as CEO, which began in 2005 and would stretch for twenty years until he announced his transition to chairman in 2025, can be divided into three distinct acts. The first — the divestiture — was the most counterintuitive. Rather than grow PPR by acquisition, Pinault spent his early years shrinking it. He sold Printemps in 2006. He divested Conforama. He spun off FNAC. He shed La Redoute. Each sale reduced the conglomerate's revenue while concentrating its margin profile and strategic coherence. By 2013, the transformation was complete enough to warrant a new name: PPR became Kering, a portmanteau drawn from "Ker," the Breton word for "home," and a phonetic echo of "caring." The market was skeptical. Analysts who had covered PPR as a diversified retailer didn't know what to make of a pure-play luxury group controlled by a family whose expertise was in buying and selling businesses, not in designing handbags.
What Pinault understood — and what the market would eventually price in — was that luxury goods possess a set of economic characteristics that are almost unique in consumer commerce. The gross margins are astronomical, often exceeding 65–70%. The brands, when properly managed, appreciate rather than depreciate over time. The customer base is bifurcated between aspirational buyers (high volume, lower per-transaction value, sensitive to economic cycles) and ultra-high-net-worth clients (low volume, enormous per-transaction value, largely indifferent to recessions). And the barriers to entry are not technological but temporal: you cannot manufacture a hundred-year heritage, you can only buy one.
Most of our brands, we're producing in Italy and in France… we're selling a part of our culture.
This logic drove the second act — the brand elevation. Between 2005 and 2024, Kering reference documents show, revenues at Saint Laurent were multiplied by 18. Bottega Veneta grew 11-fold. Balenciaga, whose figures Kering does not disclose separately, is estimated by market sources to have grown more than 30-fold over the same period. The group's total luxury revenues were multiplied by six, and profit by a factor of seven. These were not incremental gains. They were transformations — achieved by pairing audacious creative directors with commercially savvy CEOs, investing aggressively in directly operated retail (which carries margins far superior to wholesale), and exercising a degree of creative risk tolerance that most corporations would find terrifying.
The Tom Ford Precedent
The template was established before François-Henri even took the CEO chair. In 1994, Gucci — then a tarnished, family-scarred Italian house on the verge of irrelevance — appointed a Texan named Tom Ford as its creative director. Ford, working alongside CEO Domenico De Sole, reinvented the brand so completely that Gucci went from near-bankruptcy to a market capitalization that attracted the attention of both François Pinault and Bernard Arnault. Ford's Gucci was sex, power, and razor-edged minimalism. It was the proof of concept for what would become the luxury industry's central operating model: hire a visionary designer, give them creative control, back them with world-class commercial infrastructure, and watch the alchemy of desire generate thirty-point operating margins.
When Ford and De Sole departed in 2004 after clashing with the Pinault family over creative and managerial autonomy, Gucci entered a long, uneven middle period. Frida Giannini took over design duties and ran the house from 2006 to 2014, delivering competent but uninspiring growth. The brand was profitable but lacked cultural heat. It was, in the industry's brutal shorthand, boring.
The resurrection came in 2015, when Kering installed Marco Bizzarri as CEO and — in a move that stunned the industry — promoted the virtually unknown Alessandro Michele from an accessories design role to creative director. Michele's vision was everything Gucci had not been under Giannini: maximalist, gender-fluid, referentially chaotic, draped in flora and fauna and geek-chic eccentricity. The bet worked beyond anyone's projections. Under Michele and Bizzarri, Gucci's revenue surged from approximately €3.9 billion in 2015 to a peak of €10.5 billion in 2022. At its zenith, Gucci accounted for roughly 60% of Kering's total revenue and an even larger share of its operating profit. Bizzarri set the target of surpassing Louis Vuitton at €10 billion. He nearly got there.
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Gucci's Creative Cycles
The brand's revenue trajectory mirrors its creative director appointments
1994Tom Ford appointed creative director; Gucci begins its transformation from near-bankruptcy to megabrand.
2004Ford and De Sole depart after clash with Pinault family; Frida Giannini takes creative reins.
2015Alessandro Michele named creative director alongside CEO Marco Bizzarri; revenue begins surge from ~€3.9B.
2022Gucci peaks at approximately €10.5B in revenue; Michele's maximalist aesthetic shows signs of fatigue.
2023Sabato De Sarno appointed creative director; tasked with elevating the brand toward quieter luxury.
2025De Sarno exits after less than two years. Demna (formerly of Balenciaga) named Artistic Director. Francesca Bellettini appointed President and CEO of Gucci.
But the Michele era contained the seeds of its own unwinding. The aesthetic that had electrified younger consumers — the double-G logos on everything, the maximalist layering, the streetwear-adjacent pricing — also made Gucci deeply cyclical in a way that competitors like Hermès and, to some extent, Louis Vuitton were not. When tastes shifted, as they inevitably did, Gucci's volume-driven model was exposed. The brand had sold desire at scale, but scale and desire exist in tension in luxury: the more people carry your bag, the less exclusive it feels, and the fewer people want to carry it next season.
The Gucci Dependency Trap
This is the paradox at the heart of Kering — the thing that separates it from LVMH, from Hermès, from Richemont, and explains both its extraordinary upside and its structural vulnerability. Kering is, for all its portfolio breadth, a Gucci company. In 2024, even after Gucci's precipitous decline, the house still generated roughly 45% of group revenue. At its 2022 peak, that figure was closer to 60%, and the share of group operating profit was higher still — approaching 78% at various points. No other brand in the portfolio comes close.
Kering has many issues right now, but Gucci is core. If Gucci does not perform, Kering will not rerate.
LVMH, by contrast, operates 75 brands across five divisions — fashion and leather goods, wines and spirits, perfumes and cosmetics, watches and jewelry, and selective retailing — with no single brand, not even Louis Vuitton, accounting for more than roughly 30% of group revenue. Hermès is a single-brand company, but its brand is arguably the most resilient in luxury, with operating margins consistently above 40% and a clientele so wealthy that macroeconomic cycles barely register. Kering occupies an uncomfortable middle ground: diversified enough to maintain the overhead of a conglomerate, concentrated enough that a single brand's stumble sends the entire group into free fall.
The portfolio around Gucci is strong in concept but insufficient in scale. Saint Laurent, which Francesca Bellettini grew from €550 million in annual revenue in 2013 to €3.2 billion by 2023, is a genuine success story — but it too has seen sales slip as post-pandemic luxury demand waned, with a 7% decline in H1 2024. Bottega Veneta, the Vicenza-born leather goods house that invented the Intrecciato weave in 1975 and built its identity on the tagline "When Your Own Initials Are Enough," has been a critical darling under a succession of creative directors — Daniel Lee's viral social media-era reinvention, followed by Matthieu Blazy's more cerebral approach, and now Louise Trotter as of January 2025. But Bottega remains a mid-single-digit-billion brand, unable to fill the gap left by Gucci's contraction. Balenciaga, which under Demna's creative direction became one of the most talked-about brands in fashion, was derailed by a 2022 advertising scandal involving children and has spent the years since fighting its way back, with Demna himself departing for — in a move that captures the incestuous circularity of luxury creative talent — the artistic directorship of Gucci in 2025.
The Artisan's Dilemma
Kering's brand portfolio descends from some of the most storied ateliers in fashion history. Gucci, founded in 1921 by a Florentine luggage maker who drew inspiration from the equestrian world. Balenciaga, established in 1917 by
Cristóbal Balenciaga, the Spanish-born couturier whom
Christian Dior himself called "the master of us all," whose architectural silhouettes — the Sack dress of 1957, the dropped waistlines, the structural hourglass jackets — redefined the female form. Saint Laurent, founded in 1961 by the prodigy who put women in tuxedos and invented luxury ready-to-wear with Saint Laurent Rive Gauche in 1966. Bottega Veneta, born in 1966 as a rebellion against logo culture, its woven leather so distinctive it needed no monogram.
These are not brands that were created by marketing departments. They were born from the hands of obsessive craftsmen and radical designers. And this heritage is both Kering's greatest asset and its most treacherous operating challenge. Because the modern luxury conglomerate exists in permanent tension between the logic of creative expression — which is inherently unpredictable, personal, and resistant to systemization — and the logic of financial markets, which demand consistent growth, predictable margins, and replicable models. The conglomerate model works brilliantly when a creative director is hot: the corporate infrastructure — supply chain, retail real estate, media buying, data analytics — amplifies the creative vision into billions of revenue. But when the creative vision fades, or when a transition between directors misfires, the same infrastructure becomes dead weight: you're paying rent on 500 stores selling product that nobody wants.
As you know, I am the group's largest shareholder and I am obviously not satisfied with this share price.
This is why the creative director appointment is the single highest-leverage decision in luxury — and the one most fraught with risk. A brilliant hire can multiply revenue by five in a decade. A mediocre one can send a brand into a spiral that takes years to reverse. And the recent history of Gucci demonstrates both sides with painful clarity: Michele's appointment in 2015 was a masterstroke that generated perhaps €30 billion in cumulative incremental revenue over seven years. De Sarno's appointment in 2023 — an attempt to pivot Gucci toward the quieter, more timeless aesthetic that was working for brands like Bottega Veneta and The Row — failed to resonate with consumers and was abandoned in under two years. As Business of Fashion's Robert Williams observed, "Gucci can stand for a lot of things and I think that's where they got a bit confused."
The House of Many Houses
Beyond the big four — Gucci, Saint Laurent, Bottega Veneta, Balenciaga — Kering's portfolio encompasses a constellation of smaller houses and newer acquisitions that reveal the group's evolving strategic ambitions. Alexander McQueen, the British house founded by the late Lee Alexander McQueen, has struggled to find its footing creatively since the departure of Sarah Burton in 2023, who had served as creative director for nearly two decades and represented a direct link to the founder's vision. Brioni, the Roman menswear house, underwent a leadership change in 2025, with Federico Arrigoni — previously deputy CEO of Saint Laurent — taking the CEO role. Pomellato, the Milanese jewelry house, and Qeelin, the Chinese fine jewelry brand, occupy a nascent hard luxury category where Kering has historically been weak relative to Richemont (which owns Cartier and Van Cleef & Arpels).
Then there is the spree. In the years leading up to the current downturn, Kering embarked on an acquisition campaign that significantly expanded its scope — and its balance sheet. The group acquired Creed, the British fragrance house, in late 2023. It purchased a 30% stake in Valentino. It bought Maui Jim, the premium eyewear brand, adding to the Kering Eyewear platform that Roberto Vedovotto had been building since 2015. And it invested heavily in prime real estate — flagship locations that would anchor its retail network but also tied up capital at precisely the moment revenue was contracting.
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Kering's Expansion Beyond Fashion
Key acquisitions and ventures that diversified the portfolio
2015Kering Eyewear launches under Roberto Vedovotto, bringing Gucci eyewear in-house and disrupting the Luxottica-dominated market.
2017Kering Eyewear signs partnership with Richemont to develop Cartier eyewear — its first external deal.
2023Acquisition of Creed, the heritage British fragrance house. Purchase of 30% stake in Valentino. Acquisition of Maui Jim eyewear.
2025L'Oréal acquires Kering Beauté in a deal reportedly valued at approximately $4.7 billion, marking Kering's exit from its in-house beauty operations.
The debt load swelled. By early 2025, analysts were noting that Kering had begun selling real estate — including the Boucheron headquarters and flagship on Place Vendôme — in what appeared to be a treasury management exercise born more of necessity than strategy. As one BoF analyst put it, "choosing to cash in on the fact that this building is worth a lot of money is a bit worrying that they feel the need to get that treasury right now."
The Bellettini Gambit
If one person embodies both the promise and the peril of Kering's next chapter, it is Francesca Bellettini. An investment banker turned fashion executive, Bellettini spent a decade at Saint Laurent — first as CEO from 2013, overseeing its transformation from a €550 million house to a €3.2 billion powerhouse under creative director Anthony Vaccarello. Her method was almost monastic in its discipline: controlled expansion, consistent visual identity (those monochromatic black-and-white boutiques), a refusal to chase trends, and a pricing architecture that stretched from accessible leather goods to high-end ready-to-wear without diluting the brand's core proposition.
In September 2023, Pinault promoted Bellettini to deputy CEO for brand development, making her responsible for the creative and commercial direction of every house in the portfolio — the most powerful executive position at Kering below the CEO itself. She joined a growing cadre of women at the apex of luxury leadership: Marta Ortega at Inditex, Leena Nair at Chanel, Delphine Arnault at LVMH's fashion and leather goods division. But she also walked into what academics call the "glass cliff" — a leadership role assumed at the moment of maximum institutional crisis. Gucci was in decline. Balenciaga was recovering from reputational damage. McQueen was seeking a new creative identity. The luxury cycle was turning. And Kering's share price was at a seven-year low.
What Bellettini has done since is arguably the most aggressive leadership reshuffle in modern luxury history. In the span of eighteen months, three Kering houses received new creative directors — Demna moving from Balenciaga to Gucci, Pierpaolo Piccioli (formerly of Valentino) arriving at Balenciaga, Louise Trotter (formerly of Carven) taking the reins at Bottega Veneta — and four houses installed new CEOs. The scale of turnover is breathtaking. In an industry where creative transitions take twelve to eighteen months to hit the product floor, Kering has essentially bet the company on a simultaneous multi-brand reset.
"Creativity is our legacy," Bellettini told WWD, explaining the group's new corporate tagline that replaced the previous "Empowering Imagination." The shift in language is revealing: from the corporate-speak of empowerment to the weight of inheritance. "Legacy starts from your heritage, starts from your history," she said, "but what fuels the legacy is creativity. The creativity of today builds a legacy of tomorrow."
The CEO Succession
The most consequential of all the recent changes, however, is not at any individual house. In 2025, after twenty years as CEO, François-Henri Pinault announced he would transition to the role of chairman, handing operational control to Luca de Meo — a man with no luxury experience whatsoever. De Meo, previously the CEO of Renault Group, is an automotive executive. The choice was deliberate and provocative: Pinault was not looking for someone who understood fashion but for someone who understood how to manage complex multi-brand industrial organizations through transformational periods. At Renault, de Meo had navigated the company through the fallout of the Carlos Ghosn scandal, the transition to electric vehicles, and the restructuring of the Renault-Nissan alliance. He was, in Pinault's framing, a turnaround artist with operational credentials.
"It's not up to the company to adapt to the family that controls it," Pinault told WWD. "It's up to the family to adapt to the needs of the company. It's the right time for Kering to have a new CEO, to have a new perspective, a new vision."
The Artémis holding company — through which the Pinault family controls 42.23% of Kering's share capital and 58.99% of voting rights — ensures that the family retains ultimate authority. But the installation of an outsider CEO, paired with Bellettini's expanded role and the departure of long-time Pinault lieutenant Jean-François Palus from the Gucci CEO position, signals something more than a routine succession. It signals that even the family recognizes the current model needs reinvention.
A War Fought on Multiple Fronts
The competitive landscape Kering faces in 2025 is fundamentally different from the one that existed when François-Henri Pinault took over in 2005. LVMH, under Bernard Arnault, has become a leviathan: €86.2 billion in revenue in 2023, 75 brands across five divisions, a market capitalization that has at various points exceeded €400 billion. The Savigny Luxury Index data is stark: LVMH accounts for 42% of the index's total revenue and 45% of its enterprise value. Since 2000, LVMH has made approximately 140 acquisitions — more than triple Kering's roughly 40. The scale advantage compounds: LVMH can absorb a brand's underperformance in one division because another division is surging; it can leverage its media buying across dozens of brands; it can rotate managerial talent from house to house with a depth of bench that Kering simply cannot match.
Then there is Hermès — the anti-conglomerate, the single-brand company that generates operating margins above 40% by producing scarcity with an almost religious discipline. Hermès's Birkin bags have waiting lists that stretch years. Its clientele spends not because they want to signal status to peers, but because the product itself — the leather, the stitching, the exclusivity — constitutes its own category of desire. Hermès does not compete with Gucci in any meaningful sense; it exists in a parallel universe where the rules of fashion cycles barely apply.
And the emerging threat may be the most dangerous. Brands like
Brunello Cucinelli, Moncler, and Loro Piana (now owned by LVMH) have demonstrated that consumers are migrating toward what the industry calls "quiet luxury" — understated, craft-driven, aspirational in a way that privileges quality over logos. This is precisely the aesthetic territory that De Sarno's Gucci was supposed to occupy. The fact that it failed there — that Gucci's DNA may be too maximalist, too culturally omnivorous, to execute a quiet luxury strategy — is one of the most important unresolved questions in the industry.
The Eyewear Exception
Not everything at Kering is in crisis. In fact, the group's most underappreciated strategic asset may be the one furthest from the fashion runway. Kering Eyewear, the in-house eyewear platform launched in 2015 under Roberto Vedovotto, reported a 24% increase in revenue in 2024 — a striking outlier in a year of broad declines. The venture was conceived as a direct challenge to the Luxottica-EssilorLuxottica monopoly that dominates global eyewear manufacturing and distribution. Rather than licensing its brands' names to an external manufacturer (the industry standard), Kering brought eyewear design, production, and distribution in-house — creating what Vedovotto described as an "intrapreneurial" venture within the larger group.
The logic was elegant: eyewear is a high-margin category with enormous brand extension potential, and licensing it to Luxottica meant surrendering both profit and creative control. By 2017, Kering Eyewear had signed a partnership with Richemont to develop Cartier eyewear — its first external deal, and a validation that the platform could operate beyond Kering's own brands. The portfolio now spans fifteen-plus brands. It is, within the wreckage of 2024, the proof that Kering's centralized platform model can work — that shared infrastructure, when applied to the right category with the right degree of creative latitude, can generate growth even in a down cycle.
The Architecture of What Comes Next
In the spring of 2025, Kering reported first-quarter revenue down another 14%, with Gucci suffering a 25% decline and weakness spreading to Saint Laurent and Balenciaga. The trajectory had not yet inflected. But beneath the headline numbers, the group was executing on a multi-year bet that requires patience the market may not grant.
Demna's appointment at Gucci is the keystone. Having spent a decade at Balenciaga — where he transformed a house known for haute couture into the most culturally provocative brand in fashion, generating an estimated thirty-fold revenue increase before his departure — Demna brings a creative vocabulary that is large enough for Gucci's scale and sufficiently distinct from Michele's maximalism or De Sarno's quietude. His brief, as described by the company, is to go "back to the future by way of the past" — revitalizing Gucci's legacy through contemporary storytelling while retaining the brand's native flamboyance. Whether this synthesis is achievable, or whether it represents yet another creative direction change that will confuse consumers and demoralize the supply chain, is the question on which Kering's next decade hinges.
Bellettini, who orchestrated the hire, expressed a philosophy of creative stewardship that is almost the inverse of the conglomerate's traditional approach. Rather than imposing a commercial template and asking the designer to fill it, she described her role as creating the conditions for creative vision to flourish — and then getting out of the way. "I really saw how a collection is done out of nowhere, from a white piece of paper, from sensitivity, and that for me was magical," she told WWD, recounting her early career experience working with Helmut Lang.
Magic, of course, does not appear on income statements. But in luxury — in the particular, irrational, deeply human business of making people desire objects they do not need — it is the only thing that does.
Somewhere in Florence, in a factory complex that employs thousands of artisans who stitch and polish and assemble Gucci leather goods, there are workers who have seen creative directors come and go, who have watched the brand surge and collapse and surge again, and who continue, day after day, to produce the Bamboo 1947 bag and the Horsebit 1953 loafer with the same techniques that Guccio Gucci's original craftsmen used a century ago. They are the substrate beneath the spectacle — the part that doesn't change when everything else does. The question for Kering is whether the spectacle can be rebuilt one more time on top of it. The proposed dividend for 2024 is €6 per share. Kering paid €14 in 2022.
