Business as usual at Kering (PPR)
At the recently held 2013 edition of the American Express Publishing Luxury Summit, Mr Alexis Babeau, Managing Director of Kering’s Luxury Division spoke about his company’s business philosophy based on three steps in attracting luxury consumers: Attune – listening to consumers to help differentiate between brands, Anticipate – understanding changes in desirability, reason for bold decisions such as the recent acquisition of British shoemaker Christopher Kane, Act – challenging the status quo and exhibiting the strategy with passion and imagination.
Such rhetoric may have been relevant 3 years ago, however, today, luxury industry professionals, business media and analysts wish to understand what Kering, at the time PPR, learned from its failed entry into India 6 years ago when it had to close several Gucci stores and re-open with a different local partner, or what are the measures Kering is taking to tackle the slow-down in China and its over-exposure in the Chinese market, especially for the Gucci brand.
Another much more relevant topic of debate, which seems to be entirely avoided by Kering management is the relationship between creative and corporate at their fashion houses. In an interview this week (exclusive to System Magazine), Nicolas Ghesquière, former Creative Director at Baleciaga (Kering) has spoken about the division and lack of synergy between creative and corporate within the house, including the retail strategy ‘They wanted to open up a load of stores but in really mediocre spaces, where people weren’t aware of the brand. It was a strategy that I just couldn’t relate to. I found this garage space on Faubourg-Saint-Honoré; I got in contact with the real estate guy who’s a friend of a friend, and we started talking… And when I went back to Balenciaga, the reaction was, ‘Oh no, no, no, not Faubourg-Saint-Honoré, you can’t be serious?’
Last week, Kering reported its financial data for the first quarter of 2013, with a slow down in growth for the majority of its luxury brands and a sales drop for its sports & lifestyle division.