Crossroads: Kering’s Current Challenges and the Road Ahead

In the first article of this series, we examined how Kering has undergone one of the most decisive transformations in modern European corporate history. What began as a broad conglomerate spanning retail, distribution and various non luxury assets progressively refocused itself into a pure luxury group. This shift was neither cosmetic nor linear. It involved dismantling legacy businesses, reallocating capital at scale and building an identity rooted in high craftsmanship, brand heritage and global desirability. That strategic evolution created the platform on which the group thrived during the 2010s, with Gucci becoming the engine of an extraordinary growth cycle. However, by the early 2020s it became clear that the strengths of that era were also its limitations. The reliance on a single blockbuster maison reduced strategic flexibility and exposed the group to concentration risk.

In the first article of this series Reinvention: Kering’s Strategic Transformation — CARRARA Advisory, we examined how Kering began addressing this by undertaking a wide reinvention of its creative and organizational foundations. Leadership changes, new creative visions across the maisons and a deliberate effort to refresh the group’s identity marked the early steps of this transition.

In the second article Performance: The Financial Backbone of Kering’s Transformation — CARRARA Advisory, we shifted from creative transformation to the financial backbone that must sustain it. We analyzed how margin pressures, retail productivity issues and a rising cost structure had eroded profitability. We looked at capital allocation choices, debt levels, and the broader question of whether the financial architecture of the group was adequate for the ambitions it was now describing. The message was straightforward. Reinvention requires financial firepower. Kering needed operational discipline, a cleaner balance sheet and sharper execution to move from vision to delivery.

This third article brings the two fronts together. Strategic repositioning and financial rigor are converging, and the group now faces the most delicate phase of its journey. The latest developments, most visibly the sale of the Kering Beauté division to L’Oréal, highlight both the urgency of the situation and the choices the group must make to stabilize its trajectory. Kering is at a crossroads, and what it decides in the next eighteen to twenty-four months will determine not only whether the recent transformation succeeds but whether the group can reclaim a leadership role in the luxury sector.

This is the moment when strategic ambition meets financial reality. It is also the moment when investors, employees and industry observers will start distinguishing rhetoric from resolve.

 

The Beauty Sale: A Necessary Step or a Strategic Retreat

The announcement of the sale of Kering Beauté to L’Oréal for approximately four billion euro has naturally generated intense debate. At first sight, the transaction looks simple. Kering bought Creed in mid-2023 for about three point five billion euro and consolidated it with a newly assembled set of internal beauty capabilities and licenses. In 2024, the beauty division reported roughly three hundred and twenty three million euro in revenues, largely driven by Creed. Two years after the acquisition, the group is selling the entire beauty package, including Creed and exclusive license for Gucci, Bottega Veneta and Balenciaga, for about four billion euro.

On the surface, this appears like a clean capital gain. The difference between the four billion euro inflow and the original Creed purchase price seems to imply a comfortable five hundred million euro upside. However, anyone with experience in M&A or divestitures knows that headline numbers distort reality. They ignore the frictional costs that accumulate around a transaction. Advisory fees, legal and structuring costs, taxes, and the operating losses reported by the division must all be netted out. Kering Beauté posted a sixty million euro operating loss in the first half of 2025 alone, and the setup period involved integration costs, restructuring charges and investments that are not always immediately visible in public numbers.

The four billion euro figure also includes value associated with licenses, notably Gucci, where cash flows are staggered because of the existing arrangement with Coty that only expires in 2028. In essence, not all the value represents near term liquidity. Some of it reflects deferred economics that L’Oréal will unlock only in a few years. If one aggregates these adjustments, it becomes evident that the real economic result of the transaction is either a small gain, a modest loss or essentially break even. What Kering achieves is not an arbitrage win but a liquidity event.

Why does liquidity matter so much now. Because Kering’s leverage had been rising to levels that were starting to constrain its flexibility. At mid-2025, net debt hovered around nine and a half billion euro. Injecting four billion euro would bring this down to roughly five and a half billion, which materially improves the group’s net debt to EBITDA ratio. Using the 2024 EBITDA of about four point six billion euro, leverage falls from around two times to roughly one point two times. In the current interest rate environment, with markets demanding more discipline from cyclical consumer companies, this reduction matters. It lowers interest expenses, strengthens the credit profile and gives the group breathing room to absorb volatility.

Yet liquidity always comes with a trade-off. By selling the beauty arm, Kering gives up the potential future upside of a high margin category. Beauty is not just profitable. It is a brand building funnel. For many luxury brands, beauty acts as an entry point for younger consumers, creates visibility and helps support the desirability halo of the maisons. LVMH did not become the global leader in luxury simply through leather goods. Dior Beauty and its related activities are foundational pillars of the group’s ecosystem.

By exiting beauty, Kering simplifies its balance sheet but sacrifices a long-term strategic lever. The question is not whether the sale was right or wrong in absolute terms. The question is whether the conditions of the group made such a sacrifice necessary. And on this, the answer is relatively clear. Rising debt, declining Gucci performance, pressure on margins and the need to invest heavily across several maisons left Kering without a margin of maneuver. The sale is a pragmatic decision, not a strategic ambition. It buys time, not a new identity.

 

A Structural Challenge: Dependence on Gucci

Every major luxury group has a flagship brand that drives disproportionate weight in revenues and operating income. LVMH has Louis Vuitton. Richemont has Cartier. Prada Group has Prada and Miu Miu. What differentiates these groups from Kering is not the existence of a flagship but the balance surrounding it. LVMH has developed multiple engines that supplement Louis Vuitton, from Dior to Sephora to spirits. Richemont has strengthened its distribution and hard luxury businesses to reduce volatility. Kering, in contrast, remains anchored to a model where Gucci generates 63% of group operating income (2024 data).

This level of concentration creates fragility. When Gucci performs, Kering outperforms the market. When Gucci falters, the entire group comes under pressure. Over the past three years, the brand has gone through a delicate repositioning. The departure of Alessandro Michele ended a creative chapter that had defined Gucci’s visual identity for nearly a decade. Michele’s tenure had created extraordinary momentum, but it also left the brand with a dramatic aesthetic imprint that was difficult to evolve without destabilizing its core. The handover to Sabato De Sarno and then more recently to Demna was necessary to reset the brand toward more timeless luxury codes, but that journey is inherently long. Creative transitions take time, and the retail environment has not been supportive. Consumer sentiment in China weakened. US aspirational buyers pulled back. European tourism shifted. This confluence of factors placed Gucci in a vulnerable position.

Luca de Meo, the new CEO, has been explicit about the risks. In his internal communications he described Gucci exposure as structurally excessive. He called for a more balanced group where Saint Laurent, Bottega Veneta and Balenciaga contribute more meaningfully to earnings. This is not simply a question of diversification for the sake of optics. It is a strategic imperative. A group cannot sustain long-term reinvention if it depends on one brand to generate the investment capacity for the entire portfolio.

The beauty sale, ironically, increases dependence on Gucci in the short term. It reduces diversification and places even more pressure on the turnaround of the core fashion houses. The path forward for Kering therefore requires two parallel efforts. Gucci must regain creative momentum and commercial heat, and the other maisons must accelerate their expansion. Neither objective is easy, but both are essential.

 

Operational Reality: A Group in Need of Streamlining

Beyond brand dynamics, Kering’s organizational structure has accumulated inefficiencies. Over time, the group developed multiple layers between headquarters, brand leadership and creative teams. This structure made sense during years of explosive growth, when speed and experimentation were valuable. Today, the environment demands clarity, discipline and cost efficiency. De Meo has made clear that he intends to streamline operations. He has already overseen the closure of more than fifty stores and has pointed to the need to rebalance the retail footprint, reflecting the new realities of traffic patterns and regional demand.

Retail productivity in Europe and North America has faced sustained pressure. Rising rents, increasing payroll costs and shifts in tourist flows have all contributed to lower margins. The obvious solution is not to expand blindly but to optimize. Kering must refine its location strategy, reduce overlap, rationalize assortments and push for an omnichannel model where the role of the store is more experiential and less transactional. The long cycle of double digit price increases that the industry relied on for a decade is also starting to show its limits. Consumers, especially in the United States, have become more price sensitive, and luxury brands need to justify their positioning through craftsmanship, service and scarcity rather than constant price inflation.

Supply chain simplification is another critical front. Unlike LVMH, which has historically brought more manufacturing in house, Kering still relies on a higher share of external partners. This increases costs, reduces visibility and limits operational control. De Meo’s industrial background suggests he will seek more integration, more standardization where appropriate, and more investment in core production capabilities.

The aim is not to create a monolithic machine but to create a lighter system, more coherent and less duplicative, where cross brand synergies exist without crushing the independence of the maisons.

 

The Strategic Identity Question: What Kind of Group Is Kering Trying to Be

A question that recurs across investors and industry analysts is deceptively simple. What is Kering. Is it a brand incubator that thrives on creative volatility, placing bets on designers with disruptive visions. Or is it evolving toward a more classic model, closer to LVMH, where long lasting maisons with stable identities form the backbone of the group.

For more than a decade, Kering leaned toward the incubator model. It invested in creative risk taking, embraced fashion driven cycles and benefitted from a moment in luxury history where novelty and maximalism created extraordinary growth. That period has now given way to more classic values. Consumers are rediscovering heritage. Leather goods are outperforming ready to wear. Quiet luxury has replaced logo heavy excess. In this environment, the incubator model becomes heavy and unpredictable.

Kering therefore stands before a choice. It can continue to operate as a creative laboratory, betting on bold and risky artistic visions. Or it can embrace a more anchored positioning where the group lifts each maison through shared operational excellence, careful capital allocation, coherent identity building and a long view on brand equity.

The beauty sale suggests an inclination toward simplification rather than diversification. It signals that the group is willing to narrow its focus and concentrate resources on fashion and leather goods, at least in the immediate future. That may well be prudent, but if simplified strategy is to become a competitive advantage, Kering must articulate a clear identity.

Being the challenger in global luxury requires more than adjusting cost structures. It requires a coherent story about what defines the group, what unites the maisons and what unique capabilities it brings to the market. Investors will respond more favorably to a clear and consistent narrative than to a reactive sequence of asset sales or restructurings.

 

De Meo’s Vision: Resetting the Foundations

Luca de Meo has already provided important indications of how he intends to reshape Kering. His ambition is to make the group the undisputed challenger in global luxury within five to ten years. This statement signals confidence, but it also raises questions about the execution that will be required.

He has given the maisons eighteen months to return to growth. This is an aggressive timeline, reflecting both urgency and conviction that the foundations for recovery can be built quickly. He has set a three year horizon for restoring top financial performance, meaning he expects a material improvement in margins, cash generation and return on capital within that period.

These targets rely on several levers. One is the rebalancing of the retail network, where closures and relocations must realign the group with new consumer flows. Another is the recalibration of pricing and assortments. For years, luxury brands relied on uninterrupted price increases to support margins. The new environment requires more nuance. Kering must ensure that its brands offer product architecture that resonates with core customers without eroding exclusivity.

Synergies across the group will also become a priority. Jewelry remains a promising area, especially with the experience gained from the acquisition of Pomellato years ago. Data, analytics, CRM, digital commerce and retail training can all benefit from cross brand coordination. Yet this coordination must not collapse into homogenization, which would damage the unique identity of each maison.

The real challenge is cultural. Kering must shift from an environment where creative volatility fueled growth to one where disciplined execution, industrial logic and long term brand building are equally important. De Meo’s background suggests he is comfortable with this transition. The question is whether the organization, historically aligned with a more fluid creative culture, can adapt at the required pace.

 

What Comes Next. Strategic Directions for Kering’s Next Decade

The road ahead for Kering will not be defined by a single move but by a disciplined combination of structural transformation and targeted strategic choices. The group is entering a phase in which the foundations matter as much as the brand narratives. The past decade rewarded creative bursts, bold reinventions and the energy that comes from rapid aesthetic shifts. The next decade will demand something more demanding and, in many ways, more traditional. Kering will need to build an industrial backbone that is as strong as its creative ambitions and a managerial culture that privileges consistency over volatility.

The first and unavoidable priority is what can be called Rebuild the Engine. This is the deep internal transformation the group can no longer postpone. It means increasing the synergies that already exist but have never been fully leveraged, reducing organizational layers that over time have become too complex, and investing at scale in the capabilities that define a modern luxury leader. These capabilities include digital infrastructure, supply chain integration, advanced analytics for clienteling and the full modernization of retail operations. It also means shifting from an environment in which creative volatility fueled growth to one where disciplined execution, industrial logic and long-term brand building carry equal weight. In practice, this requires clearer decision rights, simplified reporting lines, a more unified technology stack, more rigorous performance management and a stronger culture of operational accountability. Luxury can remain emotional and aspirational, but it cannot afford operational fragility. Rebuild the Engine is the foundation upon which every other scenario depends. Without it, even the most attractive strategic moves will not produce durable results.

Kering Eyewear is an important illustration of what this internal transformation can achieve when executed well. Built from scratch and scaled into a profitable, fully integrated platform, it shows the group’s ability to industrialize capabilities beyond fashion and to create a centralized operating engine that supports multiple maisons without diluting their identity (even beyond own brands!). As Kering rethinks its organizational architecture, Eyewear stands as proof that disciplined integration and operational rigor can generate real advantages and raises the question of whether the business should remain fully owned or partially monetized as part of a broader portfolio rationalization.

In parallel, Kering can steer its future along three major pillars.

The first pillar is Restore the Core. Gucci remains the emotional and economic center of gravity for the group. No credible long-term strategy can bypass the need to restore its momentum. The goal is not only to reignite demand but to rebuild the brand on a more sustainable trajectory. That means a disciplined turnaround focused on product coherence, margin quality, retail excellence and a clearer articulation of the brand’s cultural relevance. At the same time, Saint Laurent and Bottega Veneta must continue accelerating. Both have reached a scale and international visibility that make them viable pillars of a more balanced group. Their continued growth is essential to reducing dependency on Gucci and to strengthening the group’s earnings profile. Balenciaga, still navigating the aftermath of reputational setbacks, also belongs to this pillar. Stabilizing it, clarifying its creative stance and rebuilding trust will determine whether it can once again become a meaningful contributor. Restore the Core is about rebalancing the group by making sure its leading maisons perform at a level that reflects their potential.

The second pillar is Shape the Portfolio. Luxury groups evolve through cycles of acquisition and consolidation, and Kering is not exempt from this logic. Some maisons, despite their heritage and cultural relevance, may not align with the economic architecture the group needs for the next decade. Brioni and Alexander McQueen are often cited in this context. They are respected brands, but scaling them to the levels required for meaningful group impact has proven structurally difficult. A disciplined assessment of these assets may lead to divestitures that free capital and managerial attention. Portfolio shaping is not only about brands. It can extend to capital heavy investments such as real estate or owned production facilities that no longer fit the group’s financial objectives. A lighter, more coherent portfolio allows resources to be deployed where returns are highest and where the strategic fit is strongest. Shape the Portfolio is about eliminating structural drag and increasing the group’s strategic agility.

The third pillar is Elevate the Mix. Once leverage is reduced and the internal transformation is underway, Kering can return to acquisitions with a clearer sense of identity and purpose. Targets would likely be mid-sized luxury brands in categories with high margins and strong structural tailwinds. Leather goods, jewelry and other niche luxury segments remain the most attractive fields. The goal would be to acquire brands that enrich the group’s quality mix, reduce dependency on any single maison, and offer long term visibility. Any acquisition must be accretive, but more importantly, it must be coherent with the new cultural and operational model Kering is trying to build. Elevate the Mix is not about adding volume but about reinforcing the group’s long term value creation engine. The recent acquisition of a significant stake in Valentino also belongs clearly to this pillar. Valentino is one of the few independent Italian maisons with global scale, deep cultural equity and substantial room for margin expansion, and Kering’s investment signals a deliberate move toward strengthening the group’s quality mix at the top end of luxury. It is not a passive financial position but a strategic bridge toward a possible full ownership path, and it reflects the kind of targeted, high-quality acquisitions that align with the identity Kering is trying to build in its next chapter.

These four directions, taken together, form the outline of a strategy that can reposition Kering for the next decade. Rebuild the Engine establishes the foundations. Restore the Core rebuilds performance where it matters most. Shape the Portfolio clears the path of legacy burdens and creates financial flexibility. Elevate the Mix adds selective, high quality growth aligned with a renewed identity.

The risks are real. Internal transformation demands discipline and patience. Turnarounds are delicate operations that require alignment between creative direction, merchandising discipline and retail execution. Portfolio decisions are never emotionally easy. Mergers and acquisitions require precise integration capabilities. Yet the alternative, which is to allow the group to drift through slow decline, is far riskier.

Kering has reinvented itself before. It moved from a diversified conglomerate to a pure luxury player. It rode a decade long creative wave that reshaped the industry. It has the talent, the heritage and the capital to shape a new chapter. What it needs now is a return to the fundamentals that defined great luxury houses long before the era of hyper growth: craftsmanship, consistency, operational rigor and the long view.

 

Risks and Constraints: Where Execution Can Falter

The risks are multifaceted. The first is the market environment. Luxury growth is slowing compared to the extremes of 2021 and 2022. Consumers are more selective. Regional volatility is higher. The United States is unpredictable, and China continues to move in cycles.

The second risk is the internal complexity of creative transitions. Gucci’s repositioning toward more elegant, timeless luxury requires patience and investment. It may take several seasons before the market fully responds. The same applies to Bottega Veneta, where the new aesthetic must mature, and to Balenciaga, where reputation rebuilding is delicate.

The third risk lies in organizational delivery. Kering cannot repeat the pattern of slow execution that affected parts of the group in the past. Operational reforms must be swift and precise. Decision making must be simplified. Empowerment must be real, not symbolic.

A fourth risk concerns investor expectations. The beauty sale provides liquidity but also heightens scrutiny. Investors will expect clear milestones, transparent communication and consistent progress. Any perception of strategic drift will undermine confidence.

Finally, Kering must manage cultural evolution without diluting the creative essence of its maisons. The group’s strength historically came from its ability to detect and nurture creative talent. That must not be lost in the pursuit of efficiency.

 

Alternative Disruptive Paths: What Kering Could Do If Incremental Change Is Not Enough

While Kering’s immediate roadmap will likely center on operational discipline, brand elevation and portfolio optimization, there are a handful of more radical strategic moves that could reshape the group’s long-term trajectory. These are not the scenarios management is signaling today, but they are credible alternatives if the expected turnaround in Gucci and the broader maisons takes longer than planned or if structural headwinds in the sector intensify. Considering them helps frame the full strategic frontier of what the group could become.

Among the most disruptive but still realistic actions, three stand out. Each has precedent in the industry, each would alter Kering’s competitive position in a profound way, and each would require significant conviction and governance alignment.

1. A Strategic Merger or Deep Alliance: Creating a New European Luxury Champion

The first disruptive scenario would involve Kering entering a transformative merger, integration or long-term strategic alliance with another major player. The most discussed possibility in industry circles, though often viewed as distant, is a combination with Richemont. The logic is not difficult to understand. Richemont has a world class portfolio in hard luxury with Cartier, Van Cleef and Arpels, Jaeger-LeCoultre, IWC, Panerai and others, and it has long been perceived as subscale in fashion. Kering, by contrast, is strong in fashion, leather goods and accessories but lacks a robust presence in watches and jewelry. The complementarities are obvious. Together the two companies would cover the most profitable segments of global luxury with far stronger category diversification.

There are precedents. LVMH itself is the result of a long sequence of mergers and acquisitions that created an ecosystem spanning fashion, beauty, spirits and jewelry. More recently, Estée Lauder’s acquisition of Tom Ford demonstrated how multi-category integration can be used to secure long term creative assets and revenue pools. A hypothetical Kering–Richemont combination would echo that same principle but on a far larger scale. It would give Kering direct access to the high margin, highly resilient world of hard luxury, where pricing power is less dependent on creative hype and more grounded in craftsmanship and scarcity. It would, in turn, provide Richemont with the fashion and leather goods expertise that its maisons have historically lacked, creating a more balanced group.

The implications, however, would be enormous. A merger would trigger regulatory scrutiny, particularly in Europe and China. Governance complexity would rise sharply, as Richemont’s foundation-influenced structure and the Pinault family’s tight control at Kering are not easily reconciled. Integration challenges across cultures, operating models and creative governance would be significant. And the cost of capital, technology integration and internal restructuring required to make such a merger succeed would be substantial.

Yet one should not dismiss the scenario. Luxury is becoming increasingly dominated by companies with global scale, deep capital and cross category firepower. If the industry moves toward more consolidation at the top and if Kering’s organic recovery proves slower than hoped, a bold move of this type could become strategically compelling. It would redefine Kering’s competitive stance overnight and reposition the company as a truly multi-pillar luxury leader rather than a fashion-centric group with concentration exposure.

2. A Spin Off or Structural Monetization of Kering Eyewear: Turning a High Performing Division Into an Independent Growth Engine

The second disruptive option would be for Kering to spin off or structurally monetize Kering Eyewear. This business has quietly become one of the group’s most impressive success stories. Created from scratch only a decade ago, it has grown into a fully integrated industrial platform with design, manufacturing, distribution and licensing capabilities. Unlike many luxury eyewear divisions housed inside larger conglomerates, Kering Eyewear already operates with a high level of autonomy and entrepreneurial agility. The acquisition of Lindberg added technical capability and the more recent consolidation of eyewear licenses reinforced the strategic coherence of the division.

Turning this business into a separate entity through an IPO, a minority stake sale or a partnership with a major investor could unlock significant value. The eyewear market trades at valuation multiples that often exceed those of fashion houses because the category benefits from repeat purchases, scalable manufacturing and higher predictability. EssilorLuxottica’s valuation is one example. Safilo, despite being much smaller, provides another. A standalone Kering Eyewear could command multiples well above those of the broader Kering group, reflecting its industrial profile and clearer growth trajectory.

This type of move is not without precedent. Capri Holdings at one point evaluated breaking out its Jimmy Choo and Versace businesses. L’Oréal has historically spun off non core assets to sharpen strategic focus. Even Richemont separated Yoox-Net-A-Porter when it became clear that pure play luxury e commerce required a different capital model. By monetizing part of Kering Eyewear, Kering would release liquidity that could be reinvested in strategic M&A, in hard luxury, in strengthening Gucci, or even in returning capital to shareholders.

The main implication would be a shift in what Kering wants to be. If the company retains a majority stake, the spin off becomes primarily a financial maneuver that raises capital while keeping long term strategic alignment. If Kering fully separates the division, it signals a decisive reaffirmation that the group intends to remain focused on fashion, leather goods and jewelry, rather than developing parallel industrial platforms. There is merit in both paths. What matters is that Kering Eyewear has grown sizable enough that its future is no longer tied mechanically to the fate of the other maisons. It has become an asset with its own economic logic, and treating it strategically rather than passively could unlock meaningful value.

3. A Deep Digital and Clienteling Transformation: Building the Most Advanced Customer Ecosystem in Global Luxury

The third disruptive scenario involves not a portfolio shift, but a foundational reinvention of how the group operates. This would be a full scale build out of a unified digital, data and clienteling ecosystem, turning customer intelligence and personalized engagement into one of Kering’s primary competitive advantages.

The luxury industry has spoken for years about digital integration, yet true end-to-end transformation remains rare. Most groups operate with fragmented CRM systems, limited cross maison visibility and underdeveloped predictive tools. LVMH, despite its resources, still maintains siloed customer data across its maisons. Richemont made strides with YNAP but struggled to integrate it operationally. Even Hermès, the purest expression of luxury discipline, intentionally limits digital depth by keeping distribution exceptionally controlled.

Kering therefore has an opportunity. The group is large enough to justify major investments in unified infrastructure, but small enough compared to LVMH to avoid the burden of heavy legacy IT. A fully integrated client ecosystem would include a single customer ID across all maisons, data enriched with behavioral and transactional signals, advanced predictive algorithms for demand, high precision clienteling tools for store teams, personalized product drops and communication, AI-supported merchandising and replenishment and retail analytics that guide store layout, inventory and service patterns.

The implications would be enormous. A group that can understand its customers more deeply than any competitor has a natural hedge against creative volatility. It can identify high value clients earlier, grow share of wallet and stabilize revenue cycles even during periods of creative transition. It can increase retail productivity without excessive store expansion. And it can shift the company from marketing driven acquisition to relationship driven lifetime value, an area where luxury has historically lagged.

There are precedents, although none at full scale. Burberry’s attempt to be the first truly digital luxury brand more than a decade ago moved the industry forward even if it fell short operationally. Farfetch’s platform ambition showed what data driven personalization could look like, even if the economics were flawed. The hospitality sector, particularly Marriott and Hilton, demonstrate the power of unified customer IDs and cross brand loyalty. A Kering that applies this logic to luxury retail could set a new industry standard.

This strategy is not without risk. It requires heavy upfront investment, cultural adaptation and strong governance to ensure maisons adopt shared tools without losing their creative independence. But among all disruptive options, it is the one most aligned with Kering’s stated direction. The group repeatedly emphasizes operational discipline, modern capabilities and better execution. A deep digital transformation would give coherence to those ambitions and anchor the next decade of growth on infrastructure rather than luck.

 

Taken together, these three paths form a useful counterpoint to the more expected roadmap of brand elevation, portfolio tightening and the potential restart of targeted acquisitions. They represent a deeper shift in how Kering might rebuild scale, resilience and competitive power if the industry becomes more demanding or if the group concludes that incremental measures do not provide enough acceleration.

A strategic merger would redefine the group’s boundaries. A spin off of Kering Eyewear would redefine the group’s financial architecture. A deep digital transformation would redefine the group’s operating model.

None of them is simple. All require conviction and long term continuity. But each of them sits at the frontier of what a reimagined Kering could stand for if it chooses to rebuild not only its brand portfolio, but the entire logic of how it competes.

 

Conclusion: A Moment of Truth

Kering stands at a pivotal moment. The transformation outlined in the first article and the financial considerations examined in the second converge into a single, defining test. Can the group translate its reinvention into a disciplined, strategically coherent and financially robust trajectory. The sale of the beauty division to L’Oréal is a pragmatic response to an immediate need, but it also marks a boundary. It narrows optionality and increases pressure on the core fashion brands.

The road ahead requires focus. Gucci must re-establish its desirability. Saint Laurent must continue its ascent. Bottega Veneta must consolidate its relevance. Balenciaga must restore trust and credibility. Kering must streamline operations, clarify its identity and communicate a compelling narrative to the market.

This is not a crisis, but it is a decisive crossroads. Reinvention is not complete. It is entering its most demanding phase. If Kering succeeds, it will emerge leaner, more diversified and more resilient. If it fails, it risks remaining in the shadow of larger competitors with stronger financial and operational engines.

In the end, the north star is simple, even if the path is not. Discipline and diversification. Execution and identity. Creative excellence supported by operational mastery. Kering does not need to reinvent luxury. It needs to reinvent how it delivers it.

And the next eighteen months will tell us whether this transformation was an ambition or a turning point.