Gucci Turnaround Strategy Kering CEO Faces Crucial Test
Seven months into the role, Luca de Meo has secured breathing space. However, his real test begins now. The Gucci turnaround strategy is under close watch. Since joining Kering, he has acted quickly. For example, he sold assets and formed new alliances. As a result, the company strengthened its finances.
Strong Moves to Fix Finances
Before this role, de Meo led Renault. He used a similar approach at Kering. He focused on discipline and simple strategies. He paused the planned deal with Valentino. In addition, he sold the beauty unit to L’Oréal for €4 billion. He also sold premium real estate in New York and Milan. These steps improved cash flow quickly. Therefore, investor concerns about debt have eased.
Gucci Remains the Main Focus
Now, attention has shifted back to Gucci. The brand once drove most of Kering’s profits. However, sales have dropped sharply in recent years. Experts say the focus is clear. “It’s all about Gucci,” noted Bassel Choughari from Comgest. Therefore, the Gucci turnaround strategy must deliver results. The wider market also adds pressure. For instance, weaker sales at LVMH highlight slowing demand. In addition, global tensions have hurt consumer confidence.
Strategy Shift to Revive Growth
De Meo is now challenging old ideas. He has questioned Kering’s heavy reliance on Gucci. Moreover, he admitted pricing mistakes in the past. He is also centralizing control in Paris. As a result, brands like Yves Saint Laurent and Balenciaga have less independence.
At the same time, he promotes efficiency. For example, he once said a company could run using just a smartphone and apps. This shows his focus on speed and simplicity.
What Comes Next
The coming weeks are critical. Kering will report earnings soon. After that, de Meo will present his vision in Florence, Gucci’s birthplace. Investors expect clear progress. However, rebuilding Gucci will take time. The Gucci turnaround strategy must win back customers and restore trust.
