The sale of Kering’s beauty division to L’Oréal marks “an opportunity to build a strategic partnership that will allow our brands to fully express their potential”. Yet, speaking to Milano Finanza, CEO Luca de Meo did not mince words: “I also needed to find a way to reduce Kering’s debt; this sale allows us to ease the pressure on that front”. The former Renault executive (pictured, Imagoeconomica) is not, however, conceding defeat — his goal is not to sacrifice the group’s grandeur to financial prudence. Quite the opposite. Divesting the division’s management burden, he says, will enable Kering “to focus our efforts on what we do best, and where we have critical mass: our fashion brands”.
Investment to follow
“We will continue working to reduce debt”, de Meo clarifies. “That’s a priority for all of management. At the same time, we must focus on getting all our brands back on track — particularly Gucci”. Kering will continue to invest, with carefully calibrated targets. Discussing brand strategy, the CEO envisions “a group that continues to build on our core — the fashion segment — but I also want to make it less dependent on the fashion cycle. That means stabilising it, by investing in categories that are structurally less volatile”. No conversation about product strategy would be complete without addressing the supply chain — largely Italian in Kering’s case. “I’ve visited our suppliers because I wanted to understand the situation first-hand. I believe there’s a need for better coordination and for renewed investment”, he concludes, “to preserve craftsmanship and know-how, and to continue improving the quality of our products”.
Read also:
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- If the Kering–L’Oréal deal means the salvation of Gucci (and more)
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