Kering's Next Move Beyond Gucci's Grip

• Kering anticipates a return to growth in 2026, focusing on core fashion and new wellness ventures.
• CEO Luca de Meo is steering a strategic overhaul, including divesting non-core assets to reduce debt.
• Gucci's performance remains pivotal, with market watchers keen on signs of a turnaround under new artistic direction.
• The luxury sector is adapting to shifting consumer demand and economic pressures, influencing Kering's restructuring.

The Gucci Hangover

Alright, let's break this down. Kering, the behemoth behind Gucci, Saint Laurent, and others, is facing headwinds. Sales are down, Gucci's lagging, and the market's been less than forgiving. As I always say, "What's the point of having f*** you money if you can't say f*** you?" But in this case, it's more like, "What's the point of a luxury empire if the crown jewel's losing its luster?" They're trying to course-correct, but the question is, can they pull it off?

De Meo's Gamble

Enter Luca de Meo, the new CEO. This guy is supposed to be the turnaround artist. He turned around Renault. Now, he's tasked with doing the same for Kering. The pressure's on. He's selling off assets, streamlining operations, and talking about "reigniting desirability." Sounds like corporate speak, but the market seems cautiously optimistic. Analysts are watching closely, and so am I. As I always say, "Money talks, bulls*** walks." And right now, Kering needs to start walking the walk. If you want another interesting read, check out this article about Wall Street Rollercoaster Tech Dips Consumer Stocks Shine.

The China Factor and Consumer Whims

The luxury market had a wild ride post-COVID, fueled by pent-up demand and a willingness to splurge. But that's cooled off. China, once the golden goose, isn't quite laying the same number of eggs. Consumers are fickle. One minute they're chasing the latest trend, the next they're over it. Kering got caught flat-footed. They hiked prices, alienated some customers, and now they're paying the price. Lesson learned Value isn't about the price, it's about the perception.

Betting on Wellness and Longevity

De Meo's got a new trick up his sleeve: wellness and longevity. Apparently, Kering wants a piece of that pie. It's a smart move. People are obsessed with living longer and feeling better. If Kering can tap into that, they might just have a winning formula. But let's be clear, wellness is a crowded space. They'll need to bring something truly unique to the table. As I always say, "You gotta know when to hold 'em, know when to fold 'em, know when to walk away, and know when to run."

The Analyst's Angle

The analysts are cautiously optimistic, but they're not popping champagne yet. They see signs of improvement, but they want to see more. They're focused on cost savings and Gucci's turnaround. They're also waiting for Kering's Capital Markets Day in April, where De Meo is expected to lay out his long-term plan. In this business, you can't fake long-term. It's either there or it's not.

The Bottom Line

Kering's got a long road ahead. They're facing challenges on multiple fronts. But they've got the resources, the brands, and a new leader with a track record. Whether they can turn things around remains to be seen. But one thing's for sure: I'll be watching. As I always say, "I like to watch money work. It's better than sex."