Kering under de Meo: debt-cutting mandate and HR reboot to reset growth
Bottom Line Impact
If executed with precision, Kering can stabilize top line, expand margins by 150 to 250 bps over 12 months, improve leverage, and narrow the competitive gap while safeguarding brand equity through focused investment in icons and DTC.
Key Facts
4- New hire: Thomas Cuntz joins as head of talent development and people engagement after 24 years at Renault, indicating a process and performance culture shift
- Financial pressure: 2024 revenue €17.19b, down 12 percent year over year from €19.56b; net profit fell 50 percent to €1.13b
- Mandate stated: de Meo prioritizes debt reduction and cost cuts, alongside internationalizing, reorganizing, or repositioning brands
- Timeline: leadership transition began this week; organizational and cost actions expected to phase in over the next 1 to 3 quarters
Time Horizons
Executive Summary
Luca de Meo is signaling a hard reset at Kering, pairing a cost and debt reduction mandate with an HR overhaul led by a veteran from Renault. With 2024 revenue down 12 percent to €17.19b and net profit halved to €1.13b, near-term execution on efficiency, brand repositioning, and organizational discipline will define the recovery trajectory and investor confidence.
Actionable Insights
Immediate Actions (Next 30-90 days)
Set a quantified 12 month cost and cash target with monthly governance cadence
Rationale: A €400m to €600m run rate opex reduction and 5 to 8 days working capital improvement underpin debt reduction and signal disciplined execution
Role affected:CEO
Urgency level:immediate
Launch a 90 day talent and org health sprint with retention shields for top 10 percent creatives and merchants
Rationale: A cost reset risks culture and brand equity; targeted retention packages and role clarity preserve value while the new performance system takes hold
Role affected:CHRO
Urgency level:immediate
Short-term Actions (6-12 months)
Sequence balance sheet actions to derisk 2025 liquidity and leverage
Rationale: Prioritize capex deferrals on non flagship projects, renegotiate leases, and evaluate non core asset monetization to target sub 2.0x net debt to EBITDA within 12 months
Role affected:CFO
Urgency level:short-term
Protect brand equity by ring fencing icon franchises and reallocating media to high ROI markets
Rationale: Shifting 10 to 15 percent of media to performance channels in the US and Middle East and focusing on icons sustains demand during repositioning
Role affected:CMO
Urgency level:short-term
Risks & Opportunities
Primary Risks
- Execution risk from rapid cost cuts leading to creative burnout and brand equity erosion
- Sales disruption from store network rationalization and assortment pruning, especially in China and the US
- Labor relations and change management friction extending timelines in core European markets
Primary Opportunities
- Operating model reset that delivers 150 to 250 bps margin expansion within 12 months
- Portfolio sharpening and brand repositioning to restore Gucci led momentum and elevate mix
- Cross industry process excellence from Renault talent improving speed to market and productivity