The history of the largest holding in the world in the luxury sector
Year of foundation: 1963
Country: France
Today, Kering is one of the largest holdings in the world in the luxury sector.
Brands in the Kering portfolio:
Gucci (1999), Yves Saint Laurent (1999), Boucheron (2000), Bottega Veneta (2001),
Balenciaga (2001), Alexander McQueen (2001), Brioni (2011),Girard-Perregaux (2011),
Pomellato (2012),Dodo Jewelry (2012), Qeelin (2012), Ulysse Nardin (2014).
Last year, Kering acquired a 30% stake in the fashion house Valentino for more than 5 billion euros. The holding company may fully buy out the brand within five years.
Kering’s history begins in 1963, when French entrepreneur François Pinault founded Pinault S.A. At first, it was a timber trading company engaged in the woodworking business. However, over time, it began to develop and change its areas of activity.
1980s: diversification
During the economic crisis of the 1980s, Pinault began to look for new paths and markets: buying up various «falling» companies: furniture (Conforama), household appliances (Fnac) — and reviving them.
Pinault’s success in «revival» increased over time, and with the support of the French government, which sought to preserve jobs. It created favorable conditions for entrepreneurs like Pinault to buy failing private companies at bargain prices. Sometimes for one franc.
Pinault made a fortune by «reviving companies» when he bought them using government aid. He brought companies out of crisis and sold them at a profit.
1990s: development and transformation
The 1990s marked the beginning of an era of large-scale changes. The first step into the world of fashion was 2 strategic acquisitions:
- French department store chain Au Printemps SA,
- Redoute — a French multi-profile retailer.
This is how PPR — Pinault-Printemps-Redoute was born.
And the next step was a breakthrough into «heavy luxury»
In 1999, Pinault S.A. acquired a controlling stake in the famous fashion house Gucci, and over the next 2 years, PPR already owned the business of Boucheron (2000), Bottega Veneta (2001), Balenciaga (2001), Alexander McQueen (2001).
2000s: Focus on luxury and rebranding
The decision to focus entirely on the luxury segment was not made by the brand’s founder, but by his son, who took over the management of the holding in 2003. François-Henri Pinault launched a strategy of active transformation, starting with rebranding. PPR received a new name — Kering. The holding’s name has its roots in a word in the language of Brittany, which refers to the cultural traditions of the family and to the French word «caring» (care). Kering became one of the first luxury groups to actively implement environmentally responsible practices, primarily animal-friendly.
Turbulent 2024
In the first half of 2024, the holding experienced a decrease in sales by 11%, operating profit in the first half of the year decreased by 42%.
Gucci sales fell by 19%, Saint Laurent by 9%, Balenciaga and Alexander McQueen by 7%.
The only fashion house in the Kering portfolio that showed positive dynamics was Bottega Veneta, which showed growth of 4%.
Plans for the future: refusal of compromises new luxury – only “uncompromising luxury”. And if this is expensive for you, then this means that you are not our client yet.
Kering stated that it plans to adhere to the strategy of “eternal values”.
- focus of the business on timeless, high-class goods;
- refusal of sharp turns, spontaneous experiments and radical rebrandings;
- refusal of “affordable price” offers, which were bait for “promising” young buyers;
- reduction of the list of partners: wholesalers, resellers, reduction of sales in outlets;
- focus on own sales channels.
Kering reported a loss in profit due to a 16% drop in sales to €3.78 billion, including Gucci, which fell 25% in the third quarter. Saint Laurent, minus 12%. McQueen, Balenciaga and Boucheron, minus 5%.
The company’s annual operating profit is expected to fall by more than 45% in 2024 to €2.5 billion.
FACT LIST FROM FCG. KERING