Kering taps China 24k gold boom with Borland stake to rebuild Asia growth
Bottom Line Impact
If executed with discipline, Kering's Borland stake and related China initiatives can gradually pivot the group’s Asia growth engine toward higher-margin, structurally growing gold jewelry and culturally resonant brands, improving revenue resilience, strengthening competitive positioning against both global and local rivals, and enhancing long-term brand equity among younger Chinese consumers despite limited near-term financial contribution.
Key Facts
5- Borland raised over 100 million yuan (approximately $14 million) in its latest financing round, with Kering acquiring a minority stake alongside investors such as Xiaomi, signaling cross-industry confidence in China’s gold jewelry growth.
- China is now the world’s largest consumer of physical gold, with 24k gold jewelry identified as the fastest-growing jewelry category in the market, driven by younger consumers’ Laopu effect taste shift toward expressive, identity-led gold pieces.
- Laopu, a leading 24k gold brand founded in 2009, generated more than 12 billion yuan (around $1.69 billion) in revenue in Q1 2025 and delivered a 23x share price increase in the first six months after its 2024 Hong Kong listing, underscoring the explosive investor and consumer appetite for the segment.
- Borland, founded in 1988 and managed by the Hangzhou Baolan Gold Research Institute, currently operates three stores in China (including two in top-tier luxury malls in Hangzhou and Shenzhen) with price points reaching up to $15,000 per bracelet, positioning it firmly in the accessible-to-high luxury segment.
- Kering reported Q3 2025 revenue of €3.415 billion, down 5% like-for-like versus a 15% decline in the prior quarter, and is concurrently launching Kering Craft in Shanghai and preparing the House of Dreams investment vehicle to identify and fund emerging brands with global potential.
Time Horizons
Key Roles Affected
Executive Summary
Kering's minority investment in Chinese gold jeweler Borland is a targeted move to capture the Laopu-driven 24k gold jewelry boom among younger Chinese consumers while diversifying away from its underperforming fashion core. The deal, coupled with Kering Craft and the planned House of Dreams vehicle, signals a broader China and jewelry-centric growth reset, offering strategic optionality in a structurally expanding, margin-accretive segment despite limited near-term P&L impact.
Actionable Insights
Immediate Actions (Next 30-90 days)
Define a clear 3–5 year China gold and jewelry roadmap that treats Borland as a strategic intelligence and collaboration hub, with explicit options for increased capital deployment if KPIs on growth, brand heat, and cultural relevance are met.
Rationale: Without a roadmap, the Borland stake risks remaining a passive financial asset; framing it as a structured option with defined scaling triggers will help re-anchor Kering's Asia story around high-growth jewelry and mitigate concentration risk in fashion-heavy brands.
Role affected:CEO
Urgency level:immediate
Establish a dedicated China hard luxury investment framework, aligning the Borland stake, Kering Craft, and House of Dreams capital allocation with clear hurdle rates, minority-to-control escalation criteria, and scenario analyses for RMB volatility and regulatory risk.
Rationale: A disciplined framework ensures that incremental exposure to China’s gold and creative sectors strengthens group ROIC and does not overextend capital amid current top-line pressure and ongoing optimization plans.
Role affected:CFO
Urgency level:immediate
Short-term Actions (6-12 months)
Co-create limited-edition or capsule collections that merge Borland's artisanal gold techniques with selected Kering maisons and pilot them in a few Tier-1 Chinese cities plus digital drops on key Chinese platforms.
Rationale: Fast, controlled experiments can validate whether Laopu effect codes and 24k gold storytelling translate into incremental traffic, higher engagement, and improved brand perception among Chinese Gen-Z and young millennials, informing broader creative and communication strategies.
Role affected:CMO
Urgency level:short-term
Strategic Actions
Use Borland as a benchmark to map the Chinese 24k and heritage gold competitive landscape and identify 3–5 additional potential targets or partners (brands, craft workshops, digital-native labels) for the House of Dreams pipeline.
Rationale: Systematically building a portfolio of culturally anchored Chinese assets in jewelry and craft can create a differentiated growth pillar versus peers who may focus primarily on scaling existing Western brands.
Role affected:Chief Strategy Officer
Urgency level:strategic
Risks & Opportunities
Primary Risks
- China macro and policy risk: A prolonged slowdown in discretionary spending or tighter regulation of luxury conspicuous consumption and capital markets could compress growth expectations for premium gold jewelry and constrain exits or stake increases.
- Consumer trend volatility: The Laopu effect, while powerful, could be partially cyclical or trend-driven; a shift in young consumers' preferences away from 24k gold or traditional aesthetics would challenge Borland's long-term relevance.
- Reputational and governance risk: As a minority investor, Kering has limited control over Borland's governance, sourcing practices, and brand positioning, which could create reputational exposure if there are issues in labor, sourcing, or marketing ethics.
Primary Opportunities
- Category and margin expansion: Gold jewelry offers structurally attractive gross margins and repeat purchase dynamics; scaling this segment can partially offset pressure from Kering's challenged fashion brands and improve the group’s mix and profitability in Asia.
- Cultural resonance and brand equity lift: Deep engagement with Chinese craftsmanship and local design narratives can enhance Kering’s relevance among young Chinese consumers, strengthening pricing power and brand desirability across its portfolio.
- Strategic platform for Asian growth: The combination of Borland, Kering Craft, and House of Dreams can evolve into a platform to identify, test, and scale Asian-born brands globally, positioning Kering as a gatekeeper and accelerator for regional creative talent.