Provoc, Dégenré, Ecolo How Kering managed to upset the codes of luxury
Kering advertisingThis unbridled creativity strategy succeeds in him.Gucci, the group's milk cow - 83% of the 3 billion euros in operational results last year - has chained growth records in recent years, even if it has been leaving for two years.Yves Saint Laurent (YSL) has increased by more than 20% per year for five years.As for Balenciaga, the new phenomenon of the fashion planet, it approaches, according to our information, 1.5 billion euros in turnover.Even the smallest, Bottega Veneta, is reborn from its ashes.In total, Kering's turnover exceeds 13 billion euros in 2020 and further increased by 36% over the first nine months of 2021.
This range of brands seems to satisfy its CEO François-Henri Pinault.Since his arrival in 2005, the son of François Pinault has not made any acquisition of significant size.Despite the many rumors of interest that he is lent to him towards Ferragamo, Prada or even Cartier.After having refocused the family conglomerate on luxury by evacuating all the distribution brands (La Redoute, Fnac...) or sport (Puma), he was satisfied with a few small purchases like Girard-Perregaux, Brioni or Pomallato, who came to enrich his portfolio with a dozen fashion, watchmaking and jewelry claws.
On the management side, FHP, as all nicknames, is rather relaxed.When his best enemy, Bernard Arnault, follows the strategy of his Louis Vuitton or Dior houses like milk on fire, delegates him.Still between London, where he has lived since 2014, and the United States, where his wife Salma Hayek works, he prefers to leave the long bridle to the duo artistic director - Managing Director who pilots each of his houses.The holding company is there to support you but let go and break the codes as long as it creates buzz and sales, it seems to tell them.
Gucci has, in recent years, particularly well respected the instruction.Even if Hedi Slimane had, before him, not badly jostled Yves Saint Laurent by hitting the French label with his glam rock sauce, Alessandro Michele, the artistic director (DA) of Gucci, completely awakened the beautiful Italian.Over the next day, in early 2015, the bags and gray blouses for Assagie bourgeois gave way to a whirlwind of colors and flowers with double G everywhere.And the new DA was not content to change clothes or bags.He took the upper hand on all the brand's expression channels: shops, showcases, advertisements, social networks, etc..
At his side, the managing director, Marco Bizzarri, has ensured that this new Romantic-Baroque style won everywhere in record time.Not hesitating to thank three of the six directors of zone who lacked."It was very courageous because Gucci was losing momentum and this transformation represented big investments," observes Luca Solca, analyst at Bernstein.The shock duo therefore worked at Gucci.But other duos also do wonders at Balenciaga, Ysl or Bottega Veneta, and today bear growth."It is this possible relay between its different brands which is the strength of the Kering group," said the director of spring, Jean-Marc Bellaiche.
Only, for each of them, only to decline this new grammar.With a major obsession for all: seduce those under 35.At Kering, they already represent more than 65% of turnover, when the Bain firm estimates their share in luxury customers at 57%, thanks to the battalions of Chinese.On the product side, the style therefore has nothing to do with the good chic good kind of the 16th arrondissement.
Gucci as Balenciaga juggile rap, streetwear and pop culture.In one, it is almost no longer possible to distinguish the male wardrobe from the feminine.It’s "gender fluid", as they say.In the other the cuts are "oversize" and the clothes sometimes hold disguise.In the boutique on avenue Montaigne, a Lurex hair coat at 18.000 euros meets a plastic pump molded by a 3D printer."These very creative pieces are designed to attract to the brand and make talk on the internet," reassures us the seller, tending to cover the voice of Amy Winehouse who crackles in the speakers.Even the discreet Bottega Veneta, nicknamed the Italian Hermès, offers huge godillots to give the hiccup to the bourgeois.But they are made of biodegradable rubber, so it's okay.
All these claws multiply the limited series.Not only with artists, but also with the mainstream brands of young people, such as Disney, Crocs or The North Face."We are no longer in a luxury of transmission but in products intended to be instagrammed before being sold on second -hand sites," explains a fashion journalist who prefers to keep anonymity.Moreover, Kering, who has just taken 5% of the collective locker room, is also at the forefront to master this second life of the product.At Alexander McQueen, good customers can for example resell their old bag in store.And they are entitled to a small supplement on the estimate made if they choose to spend the money on site.Clever!
But their master stroke to seduce millennials is above all to have converted the sneakers, caps and t-shirts into luxury products before everyone.At Balenciaga, the triple s, socks and others sneakers represented almost half of sales three years ago.These so -called “aspirational” categories are very expensive (825 euros for the pair of Sneaker Speed 2.0 and 295 euros the Balenciaga cap) but allow teens, by contributing, to offer their first luxury thrill when the leather bags remain unaffordable.
However, according to our information, the gross margin on such products is often more than 90%!"It is no longer the raw material that is valued but the brand," explains Joëlle de Montgolfier at Bain.As these products are still too expensive for those under 15, Kering also enters video games: Gucci on "Roblox" or "Pokémon Go", Balenciaga at "Fortnite".There, gamers can afford "skins", that is to say clothes or sneakers ... virtual.Like this Balenciaga sweatshirt at 8 euros seen on "Fortnite".
What to make noise on social networks.Besides, all means of expression are allowed as long as they raise the levels of request on Google.Demna Gvasalia, the same who transformed Kim Kardashian into a black widow, has also diverted the cartoon "Les Simpson" by singing himself alongside Anna Wintour, the priestess of "Vogue", during her last paradeParisian.And hop, 86 million additional views for Balenciaga!
For his part, Daniel Lee at Bottega Veneta simply closed his Instagram account."Suddenly, we have never talked so much about the brand on the networks," laughs Erwan Rambourg, author of "Future Luxury".The big houses in the group have also distanced themselves from fashion week, preferring to parade when they are ready ... and the media field is free.
Provocative in style, Kering is displayed at the same time as very politically correct, CSR (social and environmental responsibility) in a shoulder.Some consider François-Henri Pinault as a convinced visionary, in particular by his wife, which allowed him to speak before everyone else over the oceans or biodiversity.Others howl at the blow of the com when he announces on the TV sets stop the fur while this represents less than 0.2% of Kering sales.
Marie-Claire Daveu, the group's CSR director, remains the most pragmatic: "This is part of what our customers expect, especially young people," she says.The group's commitments, which often ends in the head peloton of the barometers such as the Dow Jones Sustainability Indices, are in any case very real.Among them, the already advanced reduction of 40% of its carbon footprint by 2025, the transition from traditional agriculture to regenerative agriculture on more than 800.000 hectares, a foundation dedicated to the fight against violence against women, etc..
Each house is invited to engage on a crowd of subjects, sometimes very political such as the fight against firearms at Gucci or animal protection at Balenciaga.During the last Simpson parade at the Châtelet Theater, the Granks were all vegans."Brands have a real ability to influence behavior," continues Ms. Daveu, ex-cabinet director at the Ministry of the Environment.But the group's initiatives do not always percolate.It is only to take a look at the Yves Saint Laurent parade in February to realize that the commitment made in 2017 to no longer employ an anorexic model is not respected in the mind.
In terms of distribution either, the group is not afraid to break the codes.Chanel or Hermès shops can still be intimidating.More those of Gucci.The Beige Beige Decor before Alessandro Michele gave way to a deluge of colors and flowery wallpapers.The tables are round, the chairs welcoming and the sales staff with caring, even for the football or the Korean teens.Kering has just developed with Apple an app called Luce which allows sellers to no longer leave the customer."It gives access to everything available in the reserve, offers relevant products to loyal customers ... The basket thus increases by 15 to 20%", welcomes the Director of Digital of Kering, Grégory Boutté.
And if purchases take off, Gucci seems to worry much less than Vuitton or Hermès to orchestrate rarity.Admittedly, sales through third -party distributors are constantly decreasing.But the brand organizes its own sales in major outlets in Japan, Italy or even in the United States, where they represent 20% of turnover according to our information.
It even designs specific ranges for these factory stores.In the suburbs of Florence, we said we were interested in the purchase of fifteen bags for a football team and the advisor offered us seven "Outlet collection" models and four of 2016 or 2017 with 50% reduction."These products for outlet are a little less good to make a real margin despite their low price", we breathe a competitor who does the same thing.
Kering, Gucci in mind, is also a pioneer in e-commerce, which already represents 13% of its sales in 2021.Everything has accelerated during the covid.And the group was suddenly one of the best prepared to allow you to try its augmented reality sneakers or to sell on zoom via real remote advisers.Above all, its marks dared to venture the first on e-commerce in China.Gucci opened his WeChat account there in 2011, ten years before the others.Today, while Chanel still gets out, all Kering's fashion claws are on Tmall Luxury Pavilion, the luxury showcase of the Chinese Amazon Alibaba."An essential player to conquer this market," says Joëlle de Montgolfier.
And the same freedom prevails in terms of production.Gucci plays the "made in" card very little.And for good reason.If the brand is indeed "of Italy", difficult to know on the other hand by whom and under what working conditions are carried out its belts or its bags.According to our information, only 20% of production is integrated, against 65% at Louis Vuitton, for example.The rest is entrusted to subcontractors (including 30% in joint venture), who themselves subcontract.
A very practical organization to adapt to sales peaks.But a weak point for the group's reputation.Which is also the subject of a tax adjustment of 1.2 billion euros in Italy for having transit its products for years by warehouses in Switzerland in order to dodge the tax.
What weaken the group.It could be even more so by the current shortness of breath of the Gucci locomotive."The brand seems to have reached a high point," says Luca Solca."She may be a little locked up on young people instead of trying to sell to everyone," supposes Erwan Rambourg.But the great guru Alessandro Michele did not say his last word.He celebrates the 100th anniversary of the brand in style with the release at the end of November of the film "House of Gucci", a parade on Sunset Boulevard in Hollywood, and emerged all the big claw icons in a Beloved line for morethirty years.After all, even the Chinese age.
Tax fraud: the French component not yet closed
A survey for "tax fraud laundering" was opened against Kering by the National Financial Prosecutor's Office in February 2019.This survey, as Mediapart revealed, is the French component of a tax montage which has enabled the group for years to reduce its taxes in France and especially in Italy.By passing the sales of all its fashion products by a Swiss company, LGI, Kering would have escaped 2.5 billion euros in taxes between 2010 and 2017.
Italy, the first cheated, inflicted a recovery of 1.2 billion in 2019.Logistics and sales activities have since passed through a new warehouse in Trecate, in the north of the peninsula (our photo).The French component, concerning 180 million euros elected by the Yves Saint Laurent brand, is said to be under regulation.More discreetly, it seems, than with our neighbors."The group considers to be up to date with French tax authorities," said its financial director, Jean-Marc Duplaix.
