Luca De Meo’s debut couldn’t have been better. After the Italian took over the management of the French luxury goods manufacturer Kering in mid-September, things seem to be looking up again for the company. In the third quarter, price- and portfolio-adjusted sales fell again by five percent compared to the same period last year. For the Italian fashion house Gucci, Kering even reported a decline of 14 percent on Wednesday evening. Gucci is Kering’s locomotive and accounts for around half of the group’s sales and two-thirds of its earnings. But analysts had expected even greater losses. As a result, the price fireworks that had triggered De Meo’s appointment in mid-June continued. Right at the start of trading on Thursday, the share price shot up by more than nine percent. The price has now doubled since mid-June. All business areas recorded an improvement compared to the previous quarter, as analysts at Royal Bank of Canada highlighted. “We consider this to be an encouraging first step towards stabilizing sales, especially for the Gucci brand,” they wrote. As in his last post as Renault managing director, where he completely renewed the model range, emphasized class over quantity and forged new partnerships, De Meo is also fundamentally reviewing Kering’s activities. He wants to present a new strategy in the first half of 2026. The number of stores could be significantly reduced. “Pragmatic” in relation to other potential disposals. There have already been initial changes. There has been a new Gucci boss, Francesca Bellettini, since mid-September. Kering and the French cosmetics group L’Oréal announced a strategic partnership a few days ago. Part of this is the sale of the cosmetics division for around four billion euros. L’Oréal is taking over the perfume manufacturer Creed, which Kering bought two years ago, as well as the cosmetics and perfume licenses for the brands Bottega Veneta and Balenciaga and in the future also Gucci. The first discussions between the two companies on this topic reportedly took place a year ago, long before De Meo took over the helm. But the partnership with L’Oréal fits only too well into the realignment of the group, which has suffered a lot in recent years. The main reasons are particularly severe sales problems for Gucci in China and a general loss of reputation for the traditional Italian brand, which also enjoys great popularity in less reputable milieus such as the hip-hop scene. Kering’s net debt was almost 9.5 billion euros at the end of June. Despite the recent increase to around 43 billion euros, the market value is still miles away from the more than 300 billion euros of arch-rival LVMH. In the British newspaper “Financial Times”, De Meo indicated that the sale of the cosmetics division to L’Oréal was probably just the beginning. He remains “pragmatic” about other potential asset sales, including a possible sale of the successful eyewear division. “I don’t want to close any doors,” said De Meo. His top priority is to refocus Kering on its fashion brands, especially Gucci. Widespread dissatisfaction among the workforce This marks a turnaround from the strategy of De Meo’s predecessor, François-Henri Pinault, whose family controls Kering and who still has influence as chairman of the board. Pinault has wanted to diversify Gucci’s activities in recent years. The cosmetics activities were intended to reduce dependence on the volatile luxury fashion business. “Without this, it is now more important to really turn things around at Gucci and Yves Saint Laurent,” says Deutsche Bank analyst Adam Cochrane. However, one open flank of De Meo’s new course is Italy. Around 13,700 Kering employees worked here last year, almost three times as many as in France. A good 80 percent of the suppliers also come from Italy. Earlier this week, hundreds of Kering employees went on strike for four hours, from Gucci to Bottega Veneta to Yves Saint Laurent and Balenciaga. There were also protest demonstrations in Milan and in Scandicci near the traditional Gucci headquarters in Florence. Something like this has not been seen for a quarter of a century. Among the strikers and demonstrators were not only workers, but also many employees, for whom such protests were a novelty. This shows the widespread dissatisfaction among the workforce. At the staff meetings, around 90 percent of those present voted for the suspension of work, it was said. The dissatisfaction stems from the fact that employees feel ignored by management. Around a year ago, the Kering management began to “act in a very authoritarian and one-sided manner,” said Massimo Bollini, secretary of the Filctem Cgil union from Florence, to the Italian newspaper “Il Fatto Quotidiano.” Learned from the newspaper An important point of contention is home work. Last November, Bellettini, then Kering’s vice chairman, informed the workforce by email that they would only be allowed to spend one day a week in the home office. This made many employees angry because, according to them, agreements with the unions stipulate several home office days per week. Kering used to boast of its amicable relationship with its employees, but from their perspective that is over. New employment contracts with socially “regressive” content were pushed through; In retail, employees had to accept the cancellation of a social bonus. The staff also learned from the newspaper about the sale of the cosmetics division to L’Oréal, which affected a number of employees in Italy. “A few months ago, the company was still used to discussing decisions with representatives in advance,” says unionist Bollini.More on the topicKering Italia is trying to put the tensions in a milder light. The reduction in home offices was already communicated in November 2024 – in line with the global strategy to “promote cohesion, collaboration and professional development” and to be based on “the approach of many companies in the industry”, it said in a statement. The company also recalls that the previous agreement had been extended twice until the end of September 2025.
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