Kering presented the new ReconKering strategic plan in Florence, which aims to rebuild the operational discipline and put the Group back on a long-term leadership trajectory, reaffirming the fundamentals of traditional luxury (True Luxury) with new trends in terms of new technologies, new customer expectations, new markets and new categories (Next Luxury).
“ReconKering is our way of reconnecting with what makes Kering unique, while embracing what luxury is becoming. True luxury is our mission and the luxury of the future is our horizon,” said Luca de Meo, CEO of Kering, adding “we face this new phase with ambition, humility and a deep trust in our teams, who will be the driving force behind the Group’s return to growth and improved performance.”
The relaunch of Gucci
The Plan focuses first and foremost on the relaunch of Gucci, rekindling the brand’s attractiveness and refocusing it on what makes it unmistakable, from the range of leather goods to ready-to-wear, footwear and jewellery. Gucci expects additional revenues of over 1 billion from the sale of leather goods by 2030.
The financial targets
Kering’s ambitions are based on disciplined execution and sustainable value creation. Brand values are measured by an external institute through 3 pillars: visibility, attractiveness and image strength. This approach will allow each Maison to monitor progress, compare with competitors and activate targeted levers, ensuring that desirability is a key factor for future growth.
The plan should guarantee an outperformance compared to the market in terms of revenues and a gradual improvement in recurring operating income; the medium-term objective is to more than double the percentage of recurring operating margin at Group level.
A structural improvement in ROCE is also expected above 20% in the medium term, supported by more solid fundamentals, better inventory discipline and more selective investments. A reduction in inventories of 1 billion euros is expected in the next 12 months and a reduction of two thirds in the medium term.
The capital allocation reflects the strategic priorities: between 5 and 6% of turnover will be reinvested to support the sustainable organic growth of the Maisons. Highly selective external growth expected through targeted and complementary acquisitions. Guaranteed a constant return for shareholders through a consistent dividend policy, with a payout ratio of around 50% of recurring net profit.
From reset to reconquest
Kering plans to complete a structural reset by the end of 2026, restoring the Group’s financial discipline, operational efficiency and strategic clarity. The reset involves a cut of at least 100 sales points from the over 1,700 currently and two thirds of the sales network renewed by 2030.
The second step is reconstruction, when Kering will enter a phase of renewed sustainable growth. Building on restored fundamentals and growing attractiveness, and supported by a fully operational Group platform, the Group will accelerate momentum across its portfolio and deliver structural improvements in profitability and returns, supported by a more balanced, resilient and higher quality portfolio.
The final phase in 2030 will be to regain its leadership as a benchmark in Next Luxury, a Group defined by attractiveness, fueled by efficiency and built for the decade ahead.
