Kering, a prominent luxury group, is embarking on a significant strategic overhaul under the leadership of CEO Luca de Meo. This transformative plan focuses on refining brand identities, optimizing the retail footprint through widespread store closures, and aggressively pursuing growth opportunities in underserved segments like high jewelry and the nascent 'longevity' market. Furthermore, the company is recalibrating its approach to the crucial Chinese market and carefully managing its investment in Valentino, signaling a new era of strategic precision and targeted expansion within the luxury sector.
Transforming Brand Portfolios and Retail Footprint
Kering is undertaking a major strategic transformation to revitalize its brands and rationalize its global retail operations. This includes a comprehensive restructuring of Alexander McQueen to address its financial underperformance and align it more closely with its core brand identity. Simultaneously, the group is implementing a significant reduction in its store count, particularly in Asia, with plans for over 175 net closures by 2026. This streamlining aims to enhance profitability and ensure a more focused and sustainable retail presence for key brands like Gucci, which will see its store network significantly trimmed from approximately 600 to around 450 locations.
The strategic adjustments at Kering extend beyond Alexander McQueen, where job cuts are unfortunately part of the repositioning effort. De Meo emphasized that McQueen had expanded too rapidly, losing its distinctive brand focus by over-relying on categories like sneakers. The future strategy dictates a return to its avant-garde roots and a more curated expansion. The broader initiative includes a substantial reduction in the group's physical retail footprint, primarily in Asia, with 75 net store closures already executed in 2025 and an additional 100 planned for 2026. This rationalization is designed to optimize operational efficiency and reallocate resources towards more profitable ventures, signaling a shift towards quality over quantity in its physical presence. The company also aims to invigorate Gucci's presence in China by focusing on product excellence rather than merely expanding physical stores.
New Horizons: Jewelry, Longevity, and Market Strategies
Kering is aggressively expanding into the high jewelry market, recognizing its resilience in a challenging luxury landscape and its potential to diversify the group's revenue streams away from the fashion cycle. The acquisition of jewelry manufacturer Raselli Franco in late 2025 underscores this commitment, providing Kering with enhanced industrial capabilities and greater control over its jewelry production. Additionally, the group is venturing into the 'longevity' sector through a joint venture with L'Oréal, viewing it as the "next luxury" category with significant potential for innovation, growth, and profitability. These strategic moves are complemented by a nuanced approach to the Chinese market, prioritizing product quality and brand desirability to re-engage increasingly sophisticated consumers.
The strategic pivot towards jewelry is a cornerstone of Kering's future growth. Despite currently representing a smaller portion of the business, brands like Boucheron, Pomellato, Qeelin, and DoDo collectively generate approximately €1 billion, and de Meo foresees immense untapped potential. The integration of Raselli Franco's manufacturing expertise aims to unlock this potential, allowing Kering to develop a robust portfolio of custom and high jewelry collections, leveraging the brand equity of its fashion houses, particularly Gucci. Concurrently, the innovative partnership with L'Oréal in the longevity space represents Kering's forward-thinking vision, identifying a new luxury segment catering to consumers with high purchasing power seeking unique experiences and services. On the geographical front, Kering is adopting a refined strategy for China, recognizing the evolving tastes of Chinese luxury consumers. Instead of merely expanding retail presence, the focus is on delivering exceptional products and enhancing brand desirability for Gucci and Saint Laurent, ensuring these brands resonate with a discerning market that values sophistication and authenticity over compulsive consumption patterns. The delayed full acquisition of Valentino until 2029 also allows Kering to consolidate its internal operations before integrating another major brand, ensuring a smoother transition and maximizing future value.
