Kering CEO Luca de Meo Shares Vision for Brand’s Future

FLORENCE — “Gucci is not vanilla ice cream. It’s spicy, sometimes bitter, sometimes super sweet.”
 
This was just one of the direct and pithy remarks Kering chief executive officer Luca de Meo made as he outlined plans for the brand, which contributes up to 40 percent of the French group’s sales.
 
Given the significance of Gucci for the group, de Meo did not hold back from commenting at length on the brand during his three-and-a-half hour speech at Kering’s Capital Markets Day in Florence on Thursday.
 
“As an Italian, it’s very easy for me to understand that Gucci is more than a brand. It’s one of the most admired expressions of the culture of this country. If you ask ChatGPT what are the most popular Italian brands, it will tell you Ferrari, Gucci and Nutella — just try.”
 
This offers both challenges and opportunities and de Meo — who touted the importance of technology several times during his remarks — relied on Kering’s data stating that Gucci “is the most well-known luxury brand in the world, and awareness is something you build with money and with time. There are two things you cannot compress. Everybody knows Gucci. That’s a huge competitive advantage. We do not need to invest to be known.”
 
He also claimed that “Gucci remains in the top five in desirability worldwide, down from number one a few years ago. That is the place we want to reclaim. Awareness is about money and time. Desirability is about doing the right things, but we must recognize with humility that over the past years, we have not always done the right things and our creative direction lacked stability and clarity, and our offer became too uneven. We sometimes diluted our identity by trying to be everything for everyone.”
 
After seven months of “brutal review,” he laid out his conclusions to investors, analysts and the press at Stazione Leopolda. While conceding the conditions to reboot Gucci had been created, the “brand should not carry the weight” of Kering’s turnaround, remaining one of the group’s priorities.
 
As reported, Gucci revenues fell 14.3 percent in the first quarter to 1.35 billion euros, or 8 percent in organic terms. The Italian fashion house, now led by former Balenciaga creative director Demna, registered a 7 percent improvement in North America, which could not compensate for enduring weakness in Western Europe and China.

“Gucci has lost some of its shine but we’ve acted decisively and we’ve seen a sequential improvement by the quarter. The recovery is real because it’s structured,” claimed de Meo.

Course Correcting

De Meo acknowledged “shortcoming,” such as the overextension of distribution in some regions, and “quality and execution not consistent with what clients expect from a house like Gucci.”

He pointed out that the company has already begun to focus and correct these issues, acknowledging the work of Francesca Bellettini, president and CEO of Gucci since September of last year, sitting in the audience with the other Kering brand leaders, and who later shared the stage in a question-and-answer session.

De Meo took the time to analyze Gucci, saying the brand “is one of the best reflections in the luxury industry of what this country stands for, warmth, color, sexy, witty, also cheeky.”
 
This is what makes Gucci “totally unique, and precisely why it’s among the most beloved luxury brands in the world.”
 
Again, he admitted that Gucci had “suffered in recent years. It has been misinterpreted, but we understand and know what we have to do as a team. We went back to the essence of the brand and what people expect from it. In the U.S., people say I feel Gucci to mean they feel good, attractive, optimistic, upbeat. In short, Gucci is a feeling, not just a goal, and this is what we need to bring back to people. We call it Rinascimento Gucci.”
 
To relaunch Gucci, “desirability is the starting point. It is the foundation on which everything else rests. Our priority is to make Gucci unmissable again, not louder, not more complex, simply unmissable and this work has already begun. We are refocusing the brand around fewer narratives, sharper, stronger and more coherent.”
 
He said Gucci’s recognizability is one of its greatest assets, and that its signifiers are being codified “in a far greater way,” citing the web, the  interlock, the GG, the Flora, the bamboo, the bit and the Jackie.

“In one second, you know it’s Gucci, and that does not mean covering the world in GG, being unmissable can also be quiet, discreet and refined, expressed through craft and identity codes that are immediately Gucci, even when they are not there and they are just subtle. We are activating this renewed identity to a Gucci Vita [Life]. This is our cultural expression that turns codes into culture.”

Making Gucci ‘Unmissable’

To make Gucci become unmissable again, “the heritage must be reinvented, not preserved under glass. It must be reinterpreted boldly with modernity, clarity and coherence and this evolution is underway. We are injecting newness into our most iconic shapes and signature styles.”
 
Gucci’s ambition is to double the contribution of icons in women’s handbags by 2030 to represent around 20 percent of leather goods, up from 10 percent today.
 
“We will do it without losing this important message, as Gucci heritage and fashion must coexist, restoring desirability requires also restoring strength in our product offer. And I think you know that begins with clarity. We are rebuilding the entire architecture with a structure that is consistent, rebalancing pricing, offering sharper families, stronger identities and a leaner assortment.”

Gucci has already reduced the number of stock keeping units, by 20 percent, which simplifies the offer and reinforces clarity, coherence and impact across all categories, de Meo remarked.
 
Gucci is anchoring the core of the business in a strong midprice proposition between 2,000 euros and 3,000 euros, elevating the top tier with richer materials and distinctive details, and redesigning the entry level without compromising the quality, he said.
 
“We are also rationalizing the carryover of the sourcing by around 20 percent by 2030.” The ambition is to deliver more than 1 billion euros of additional revenue in leather goods by 2030.
 
“Powered by a more distinctive, iconic offer in ready-to-wear,” Gucci is also “rebuilding the silhouette with a stronger stylistic intent, improving fit, proportions and construction, and bringing back recognizability in every single piece. In menswear, we are constructing a modern wardrobe anchored in refined essentials. In shoes, we are rebalancing the offer around lifestyle models, refreshing iconic shapes and tightening the architecture.”

The ambition is to grow rtw and shoes by more than 600 millions euros by 2030.
 
De Meo is also aiming to reignite jewelry and watches, with the objective for the category to grow from 200 million euros to around 700 million euros, making it one of the most dynamic engines of Gucci.
 
An emphasis will be on the 2,000 euros to 3,000 euros women’s jewelry watch segment.

Quality and Pricing

De Meo addressed quality and pricing, saying that customers notice quality as much as inconsistency and said Gucci is elevating quality across the board, investing in materials, manufacturing, processes, suppliers and finishings, improving the functionality of the bags, the construction of apparel, and increased comfort and durability of shoes.

“The value proposition is visible from the moment the client touches the product. Quality and pricing will need rebuilding trust and value, which will lead to a sell-through uplift by 20 percentage points across core categories. In parallel, we are renewing the price architecture to ensure that perceived value and price remain align in every region. Trust is essential to rebuild desirability.”

A More Productive Retail Footprint

De Meo is aiming to create a more productive retail network and balance its geographical footprint.

“We had too many stores, too many outlets, too much discounting. We have begun to correct all of this, we are right-sizing the network with fewer stores and better stores worldwide, and two-thirds of the network will be refurbished or relocated. Overall selling space will decrease by around 20 percent and outlets will be reduced by one-third to protect brand equity and full-price performance across the brand,” he said.

Sales density is meant to double from now to 2030.
 
In terms of markets, the U.S. is a bright spot as “Gucci is well understood in the U.S., its identity resonates strongly, and its fashion authority remains relatively intact,” said de Meo. “Clients there instinctively grasp what Gucci stands for, and this clarity fuels both engagement and cultural relevance. We are using this renewed momentum as a springboard to strengthen our position in other regions, as desirability often follows the cultural waves that begin in the U.S.”

Asia and China

He admitted that, in Asia, and especially in China and Korea, desirability weakened because “discipline failed there. We will fuel desirability by shifting to high-yield activations, culturally relevant storytelling and client engagement across Asia. We are ramping up new collections and reinforcing our items, pairing this with tighter distribution.”
 
During the Q&A, Bellettini said the goal is to restore brand desirability in China, after having extended distribution with “too many stores, and we didn’t react immediately, but are reviewing them now.”
 
She said she is also reviewing the product offer, “without changing what Gucci is. Icons have a value and we mistreated them.” For example, the Emblem is very important in China, she said, so Gucci is highlighting it, and improving the Marmont bag. “There’s work to do, but we are on the right track.”
 
“China has been neglected, it has to be back,” said de Meo, speaking separately with a cluster of reporters. “Allow me to say it’s been treated a bit like a trash bin, looking for easy growth, with parallel [sales], outlets, and big shops in second- and third-tier cities.

“The market has changed, it’s very sophisticated and very discerning. We have to send a very clear message, I recently went to some stores and they looked like the house of my grandmother, I did not feel the modernity.”

Pressed for a timeframe for a recovery in China, he said “the jury is out in China, perhaps not weeks, maybe a year, but the most important thing is to do the right thing and the market will reward us.”

Bellettini conceded that Gucci had “lost the aspirational customer because when you lose brand desirability you lose the aspirational customer and this happened in China and in Asia.” But she also pointed out that aspirational does not simply mean younger, “it can be every age and we must refocus on our core customers and engage with them.”
 
Underscoring the importance of execution, de Meo said Gucci “is becoming a truly client-obsessed organization with a very precise understanding of what we need to do, reconnecting first with fashionistas and opinionated clients, the style leaders and cultural voices who reignite fashion authority and desirability at the top of the conversation. And as the momentum builds, we are earning the loyalty of more discerning buyers, clients who expect quality, coherence and longevity across categories. To support this, we are embedding a customer-first mindset across everything we do, merchandising, assortment, pricing, clienteling, and all guided by sharper segmentation.”

Clienteling

Relying on data and AI is helping Gucci sharpen allocations and clienteling with hyper-personalized rituals in the stores, deeper outreach, tailored looks and more thoughtful post-purchase treatments. Assortments are being constructed with a more explicit use and more legible codes so that recognition converts to purchases in seconds.
 
Targeted acquisition programs are bringing new audiences into the brand, and “at the very top of the pyramid,” Gucci is creating exclusive experiences, curated drops and made-to-measure propositions.

“VIC contribution is progressing toward the 25 percent threshold that will anchor quality growth for the long term.”

De Meo has been building his team and he touted a simplified organization with fewer layers, better defined roles and faster decision-making.

“Agility is becoming a core principle with lean and faster cycles and teams that move at the right pace. This new operating model is already delivering real speed. In the last development cycle, we reduced the time needed to design and produce a collection by around six weeks,” he said.
 
He added that he wanted to make sure Gucci would have stability “after so many changes” and expressed his confidence in the team. “I will defend them, they are a strong group of people and it will pay off.”
 
For his part, on the sidelines of the conference, Demna said he was “impressed by the clarity” of de Meo’s speech, praising the executive’s understanding of and belief in the brand. Attending for the first time a Capital Markets Day, the designer said “it feels great to be a part of it and of the process.”
 
De Meo concluded by saying that Gucci is becoming the group’s first laboratory for innovation in AI and client intelligence.

“New tools are being tested and refined here before being scaled across Kering. Execution is how we rebuild credibility. Gucci does not need to be reinvented. It needs to be refocused, re- anchored and repositioned. We are not building a new brand. We are unlocking the extraordinary potential of the brand with coherence, clarity and discipline. We feel Gucci today, and we want the world to feel it again.”