Gucci Owner Kering Plans to Complete Structural Reset This Year in Bid to Revive Fortunes — Update

By Andrea Figueras

French luxury giant Kering said it expects to complete a structural reset by the end of this year as it aims to turn around its fortunes after a lull in growth, particularly at flagship brand Gucci.

The group on Thursday held its capital markets day, outlining its new strategy to boost growth under the leadership of longtime autos executive Luca de Meo, who took over as Kering's boss in September with the aim of breathing new life into the beleaguered company.

Kering said its plan would restore financial discipline and operational efficiency across the group while focusing on refreshing creative direction and product lineups of its brands to boost their appeal.

In the medium term, the group targets gradual market outperformance in revenue and expects to more than double the recurring 11.1% operating margin it booked in 2025.

By the end of 2028, Kering said it intends to be in a phase of renewed, sustainable growth.

The Paris-based company has struggled with weaker demand for pricey items in recent years, with Gucci being one of the hardest-hit brands in the entire luxury sector. The Italian label is pursuing a revamp strategy under a new executive and creative leadership, in an effort to rekindle consumer appetite for its designs.

Kering said it is reshaping Gucci's product architecture across categories from a strengthened leather goods offer to more coherent ready-to-wear, shoes and jewelry. This will be supported by higher quality standards, it added.

In an earnings call earlier this week, finance chief Armelle Poulou said that the company saw a good response to newness in production, with new designs now starting to hit stores under the artistic direction of Demna Gvasalia. However, the group continues to seek the recipe for Gucci's rebound in China, a key market. The CFO noted that the company will have to work hard to make the brand relevant in the Chinese market through disciplined execution and products tailored to local demand.

Other brands under Kering's umbrella, including Saint Laurent and Balenciaga, have also lost momentum in past years.

For Saint Laurent, the group intends to strengthen its men's collection and enhance its leather goods offering, while accelerating the brand's geographic expansion, with a particular focus on Asia. Balenciaga plans to expand the women's collection and strengthen its leather goods category, while broadening its geographical presence beyond Asia, where it performs well.

The company also anticipates steady shareholder returns with a dividend payout ratio around 50% of recurring net income. Return on capital employed is expected to improve to above 20% in the medium term.

Kering, which aims to be a reference player in luxury by year-end 2030, said that its ambitions reflect the group's strong portfolio and execution discipline at a time when the luxury industry faces a tough environment marked by heightened geopolitical tensions, economic volatility and uncertain market conditions.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

April 16, 2026 03:12 ET (07:12 GMT)