Kering's Strategic Shift Under New Leadership: Implications for Luxury Investors

The luxury goods sector has long been a barometer of global economic sentiment, and Kering's recent strategic recalibration under new CEO Luca de Meo has reignited investor interest in the French conglomerate. After a tumultuous 2024 marked by a 12% revenue decline and a 29% drop in EBITDALuxury Goods Market Recap (LVMH, Kering, Hermes) 2025^[1], Kering's leadership has embarked on an aggressive operational overhaul. This transformation, coupled with a bullish upgrade from AlphaValue/Baader Europe, has positioned the company at a critical inflection point for investors.

Strategic Shifts Under Luca de Meo: A Focus on Efficiency and Creativity

Luca de Meo, known for his restructuring expertise at Renault and Stellantis, has prioritized cost discipline and brand revitalization. By the end of 2025, Kering plans to close 80 boutiques (up from an initial target of 50) and reduce headcount by 4% year-to-date, with Gucci's staffing down 22% from its 2022 peakKering Deepens Cost Cuts After Another Dismal …^[4]. These measures have already yielded operational savings of 11% in H1 2025, with further reductions expected. Concurrently, the company has injected creativity into its portfolio: Demna Gvasalia's appointment as Gucci's artistic director and Francesca Bellettini's leadership at the brand signal a renewed focus on innovationAlphaValue upgrades France's Kering as new CEO 'sets the pace'^[3].

The transfer of Valentino's eyewear business to Kering Eyewear, a division that outperformed the group's overall results in 20244 takeaways from Kering’s 2025 strategy^[2], underscores a strategic pivot toward high-margin segments. These moves align with Kering's “Empowering Imagination” philosophy, emphasizing sustainability and digital engagement—trends that resonate with core affluent customers (VICs), who now account for 45% of luxury salesLuxury Goods Market Recap (LVMH, Kering, Hermes) 2025^[1].

AlphaValue Upgrade and Market Reaction: A Vote of Confidence

AlphaValue/Baader Europe's September 2025 upgrade of Kering to “Add” with a raised price target of €279AlphaValue upgrades France's Kering as new CEO 'sets the pace'^[3] reflects growing confidence in de Meo's strategy. The brokerage highlighted the CEO's ability to accelerate Kering's turnaround, particularly at Gucci, which saw a 21% like-for-like sales decline in 20244 takeaways from Kering’s 2025 strategy^[2]. The stock responded positively, surging from €239.70 on September 12 to €267.50 by September 18, 2025AlphaValue upgrades France's Kering as new CEO 'sets the pace'^[3]. This 11.5% rally within a week suggests that investors are pricing in the potential for margin expansion and brand recovery.

Kering's trailing PE ratio of 44.93 and forward PE of 38.52Luxury Goods Market Recap (LVMH, Kering, Hermes) 2025^[1] remain elevated, but the company's cost-cutting initiatives—projected to save €350 million in 20254 takeaways from Kering’s 2025 strategy^[2]—are expected to narrow the gap between current valuations and long-term growth prospects.

Industry Trends: Resilience Amid Post-Pandemic Challenges

The luxury market's resilience in 2025, despite a 2–5% sales contraction, underscores its long-term appeal. Emerging markets and generational shifts are projected to drive a 4–6% CAGR through 2030Luxury Goods Market Recap (LVMH, Kering, Hermes) 2025^[1]. Kering's focus on digital engagement—online sales now account for 35% of revenue—positions it to capitalize on AI/AR-driven consumer experiencesLuxury Goods Market Recap (LVMH, Kering, Hermes) 2025^[1]. However, macroeconomic pressures and shifting consumer behavior remain risks, particularly for brands like Gucci, which must balance heritage with innovation.

Financial Implications and Investor Sentiment

Kering's 52-week stock price increase of 18.36%Luxury Goods Market Recap (LVMH, Kering, Hermes) 2025^[1] reflects optimism about its turnaround, but the path to profitability is not without hurdles. The company's €1.5 billion in asset refinancing and projected €1.7 billion in additional liquidityKering Deepens Cost Cuts After Another Dismal …^[4] provide financial flexibility, yet margins remain under pressure. Analysts at AlphaValue note that de Meo's ability to stabilize Gucci and leverage Kering Eyewear's success will be pivotalAlphaValue upgrades France's Kering as new CEO 'sets the pace'^[3].

Conclusion: A High-Volatility Bet with Long-Term Potential

Kering's strategic shift under de Meo has rekindled investor enthusiasm, but the stock's beta of 1.12Luxury Goods Market Recap (LVMH, Kering, Hermes) 2025^[1] indicates heightened volatility. For investors, the key question is whether the company can sustain its cost discipline while reinvigorating its brands. AlphaValue's upgraded price target and the luxury sector's long-term growth trajectory suggest that Kering's challenges may be temporary. However, the success of this transformation hinges on de Meo's ability to execute his vision—a task that will define the company's trajectory in the coming years.