Will Kering CEO Luca de Meo’s industrial, automotive approach work? The “emergency doctor”, as he has described himself, was brought in by the Pinault family to steer a vehicle that was taking on debt while losing money. Clearly, drastic action was needed within a short timeframe, with de Meo’s approach now disrupting the group’s internal balance, including that of its mega creative directors. From eliminating inefficiencies to more centralised production and cutting the number of suppliers, de Meo is bringing the automotive method to Kering. But does greater efficiency mean less creativity?
The automotive method at Kering
The Financial Times reports that, during a visit to a Pomellato production workshop, de Meo was impressed by the artisans’ manual skills. He then reportedly approached one of them and jokingly whispered: “What you do is fantastic! Now I need you to do it twice as fast”. A joke that nevertheless says a great deal about the thinking of the “car guy”, as the British financial daily newspaper itself describes him. One of de Meo’s objectives is to create a more efficient company in which 70% of production is managed centrally and 30% independently by individual brands. This implies standardising production and centralising decision-making.
The corrections
Another objective is to reduce inefficiencies and, not coincidentally, last February de Meo said that “the level of bullshit has decreased enormously” within the company. Or take the fact that prêt-à-porter collections were not reaching shops until at least six months after their runway presentation. Kering’s CEO was also unhappy that each fashion house controlled by the parent company had different shoe boxes. But this should come as no surprise given that de Meo has always worked in an industry where every single rivet is purchased collectively and production is synchronised down to the minute.
A different approach to luxury
Kering’s CEO, whose approach is consistently focused on operational optimisation, is taking an approach that is “quite new” in the luxury sector. And this, according to a person close to the company quoted by the Financial Times, is “putting a lot of tension into the system”. Some employees have been unsettled by the changes, which they believe have compromised their autonomy and increased pressure to deliver results at a sustained pace. Not to mention that de Meo intends to reduce the number of Kering’s subcontractors, doubling the volume of products manufactured at the group’s 37 owned facilities in Italy.
Is there an internal clash?
Some believe that de Meo is fuelling a cultural clash within the company in an effort to change the status quo. Others approve — or feel compelled to approve — such as Saint Laurent CEO Cédric Charbit, who said: “The luxury industry needs more of this”. There are also those who disagree, pointing out that focusing on the economic side risks losing sight of the ability to make consumers dream, resulting in basic, commonplace and unappealing products.
Photo: Kering and Saint Laurent
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