Hey everyone,
Today I have summarized another interesting investor talk for you, which offers deep insights into the strategies and challenges of a large fashion group. It's about Kering $KER (+1,01 %)
Overview of the financial year
The company admitted that 2024 did not meet expectationsbut emphasized that it is working on a long-term transformation and no short-term compromises compromises. The strategy of developing brands through targeted individualization and strengthening their identity identity remains unchanged. An important point is the planned development of a more upmarket clientelewithout neglecting the existing
neglecting the existing clientele.
Strategic focus of the company
- A considerable focus on improving the quality of of the products, particularly in the reissue of iconic designs.
- The communication was reactivated in order to attract customers to the storesand investments were made in new window display concepts to emphasize the brand values. emphasize the brand values.
- The focus is on own retail storeswhile the number of outlets has been reduced and the wholesale drastically is being cut.
- Efforts are made to increase efficiency in the areas of production, logistics, technology and administration.
- The company expands through Kering Eyewear and Kering Beauté into adjacent segments in order to additional growth opportunities to exploit additional growth opportunities.
In the Q&A session of the investor meeting, various analysts expressed their concerns and asked questions about the company's strategic decisions and financial development. Edouard Aubun from Morgan Stanley began the discussion with questions about centralized management of the brands and whether this strategy will be maintained. He also asked whether the new aesthetics Gucci's new aesthetic is perceived as "boring" because it differs from a maximalist style style. The management emphasized that the centralization serves to better support the better support the brands and and create synergies. The new Gucci aesthetic is described as elegantbut not boring, and is intended to build on a stronger base be built upon.
Antoine Belge from BNP Paribas Exane inquired about the handbag launches by Gucci and the need for designer experience in this area. He also wanted an assessment of the operating profit and the sales by nationality nationalities. The management stated that the handbag launches were successful and that an experienced team is important. For 2025, a stabilization of the EBIT is expected to stabilize, although the first half of the year should be weaker.
Erwin Ramborg from HSBC discussed the situation of the Chinese clientele and whether the problems are cyclical or structural in nature. He also asked about the priorities of the new management at Saint Laurent and Balenciaga and about possible preliminary measures against US tariffs. The company sees the problems in China as cyclical and and expects a recovery in the future. The new managers are to strengthen the strengthen the brands evolutionarily and production in the USA to circumvent possible customs duties is is not being considered.
Susanna Puth from UBS asked about the drivers for Gucci's sales growth, particularly in light of the planned reduction in retail space and wholesale. The company confirmed that sales declines are expected due to closures and wholesale reductions, but anticipates mid to high single-digit growth in retail stores.
Ashley Wallace of Bank of America Merrill Lynch asked about the new leather products at Gucci, the impact of the arrival of the new creative director and the drivers of profit performance in the second half of the year. The new lines were pursuing different strategies and the arrival of the new director is not expected to change the strategy dramatically. The profit improvement is expected to be supported by higher growth in the second half of the year and by the effects of earlier cost-cutting measures.
To summarize, analysts asked a number of questions about the company's strategic realignment, financial outlook and challenges in various markets. Management emphasized its long-term vision, its focus on quality and efficiency and its targeted approach to all customer segments.
Clearly too much woulda, woulda, coulda for me. Unfortunately, none of this sounds to me like a concrete strategy to turn the company around.
Thanks for reading and stay tuned!
