Kering

Kering (French: [kɛːʁiŋ]) is a French-based multinational corporation specialized in luxury goods.

Kering S.A.
FormerlyPinault S.A.
Pinault-Printemps-Redoute
PPR
TypePublic (Société Anonyme)
Euronext: KER
CAC 40 Component
ISINFR0000121485 
IndustryLuxury
Founded1963 (1963)
FounderFrançois Pinault
Headquarters40 rue de Sèvres, Paris 7e, France
Key people
Francois-Henri Pinault
(Chairman and CEO)
ProductsLuxury goods
Revenue€15.9 billion (2019)
€4.78 billion (2019)
€2.3 billion (2019)
Total assets€27.148 billion (2019)
Total equity€10.438 billion (2019)
Number of employees
38,000 (2019)
Subsidiaries
Websitekering.com
Footnotes / references
[1]

The timber-trading company Pinault S.A. was founded in 1963 by François Pinault. After the company was quoted on Euronext Paris in 1988, it became the retail conglomerate Pinault-Printemps-Redoute (PPR) in 1994, and the luxury group Kering in 2013. The group is a constituent of the CAC 40 since 1995. François-Henri Pinault is President and CEO of Kering since 2005. In 2019, the group's revenue reached €15.9 billion.[1]

History

From timber trading to retail
See also: François Pinault

In 1963, with a loan from his family and a bank, François Pinault opened the Établissements Pinault in Brittany (France) specialized in timber trading. The company became Pinault S.A. and grew organically and through successful acquisitions. In 1988, Pinault S.A. was listed on the Paris Stock Exchange.[2]

In 1989, Pinault S.A. purchased 20% of CFAO, a French distribution conglomerate active throughout Africa. In 1990, Pinault S.A. and CFAO merged, and François Pinault became head of the newly formed group. This accelerated its acquisitions in the retail sector: Conforama (French furniture retailer) in 1991, Printemps (department stores in Paris) in 1992, which also owned 54% of La Redoute (French mail-order shopping retailer), and Fnac (French bookstore, multimedia and electronics retailer) in 1994. To align with its new activities, the group was renamed Pinault-Printemps-Redoute in 1994.[2]

In 1999, Pinault-Printemps-Redoute purchased a controlling 42% stake of the Gucci group for $3 billion and 100% of Yves Saint Laurent.[3][4][5] Those acquisitions marked the cornerstone of the group's shift towards luxury. After Gucci, Pinault-Printemps-Redoute acquired Boucheron (2000), Bottega Veneta (2001), Balenciaga (2001), and signed strategic partnerships with Alexander McQueen and Stella McCartney.[6] In 2004, Pinault-Printemps-Redoute reached a 99.4% ownership of Gucci.[7]

From retail to luxury
See also: François-Henri Pinault

In 2003, François Pinault handed over the helm of Artémis, the family holding company that controlled Pinault-Printemps-Redoute to his son François-Henri. In 2005, François-Henri Pinault became President and CEO of Pinault-Printemps-Redoute, succeeding to Serge Weinberg.[8] The group officially changed its name to PPR.[9] and kept on building a portfolio of luxury brands: The Sowind Group (owner of Girard-Perregaux) and Brioni (2011),[10] the Pomellato Group (Pomellato and Dodo, 2012),[11] Qeelin (2012),[12] Christopher Kane (2013),[13] Ulysse Nardin (2014).[14] To further this strategy, PPR offloaded its retail assets: Le Printemps (2006),[15] Conforama (2011),[16] CFAO (2012),[17] Fnac (2012), and La Redoute (2013).[18] PPR also developed a Sport & Lifestyle portfolio with the acquisition of Puma (2007),[8] Cobra Golf (2010),[19] and Volcom (2011).[20] Cobra and Volcom are since then been divested (see the respective pages for details) and Kering only holds a minority share in Puma.

On 22 March 2013, PPR changed its name to Kering to fully achieve the group's shift towards luxury. Pronounced [kɛːʁiŋ], to sound like the English word "caring", the new name is a reference to the Pinault family's region of origin, Brittany, where kêr means "home".[21][22]

Part of Kering's strategy is to name unexpected designers at the creative direction of its brands. In December 2014, Alessandro Michele, a 12-year accessories designer at Gucci, was named its creative director. He introduced an acclaimed « sophisticated, intellectual and androgynous feel » for the Florentine fashion brand[23] which tripled its sales in 5 years.[24] In 2015, following Yves Saint-Laurent's year-on-year double-digit growth under the creative direction of Hedi Slimane, Kering named a new creative director, Anthony Vaccarello, to renew the brand’s props.[25] In October 2015, Kering named Georgian-born designer Demna Gvasalia as creative director of Balenciaga to reinvent the classic Spanish couture house.[26] In a less speculative move, Kering appointed Daniel Lee - Celine's former ready-to-wear designer - as creative designer of Bottega Veneta in June 2018.[27]

In 2014, Kering launched Kering Eyewear. In March 2017, Richemont Richemont partnered with Kering Eyewear to produce Cartier, Alaïa, and Montblanc eyewear.[28] In September 2019, Kering Eyewear opened a 15,000 square-meters logistics center near Padua, Italy, with an annual output capacity of five million eyewear units.[29] In March 2018, Kering agreed to sell its shares of Stella McCartney back to its eponymous owner.[30] Kering became a luxury pure player after the sale of Puma (2018)[31] and Volcom (2019).[32] After the group built up its portfolio of luxury brands, it stopped acquisitions and capitalized on its brands' organic growth.[33] In 2019, Kering made 15,383 billion euros in revenue, +16,2% from the previous year.[1]

From luxury to sustainability
See also: Kering Foundation

Since Kering became a luxury brand, the group focused its development on sustainable development for the luxury fashion industry.[34] In April 2012, Kering committed to a 4-year plan to significantly reduce its impact on the environment. The group developed the "Environmental Profit & Loss account" (EP&L) accounting method to track its progress.[35] In 2017, the group presented its new sustainability program which targeted a 40% reduction of its global environmental impact by 2025, a strategy aligned with the UN Sustainable Development Goals.[34][36] In September 2019, Kering committed to become carbon-neutral within its operations and its supply chain.[37]

In 2013, after opening the Material Innovation Lab, a center in Novara, Italy, specialized in innovative materials and fabric sustainability,[38] Kering became part of the Dow Jones Sustainability Indices[39] and was named top sustainable textile, apparel and luxury goods corporation" in the Corporate Knights’ Global 100 index in 2018[40][41]

The Kering Foundation was created in 2008 to support women's rights initiatives worldwide. The Foundation works with local partners focused on women issues and gender equity.[42] Alongside Gucci, Kering is a strategic partner of Chime for Change, an international campaign focused on women's education, health and justice, launched by Salma Hayek-Pinault, Frida Giannini (former CEO of Gucci), and Beyoncé.[43] From 2012 to 2018, the Kering Foundation contributed to the International Day for the Elimination of Violence against Women with the White Ribbon campaign.[44] In 2015, Kering became an official partner of the Festival de Cannes and launched the program Women in Motion to raise women issues in the film industry[45] (extended to the Rencontres d'Arles photography festival in March 2019[46]).

In October 2018, Kering started to implement the use of the first 100% traceable organic cotton.[47] In December 2018, with Plug and Play, Kering launched the Kering Sustainable Innovation Award to reward and invest in startups focused on sustainability and luxury.[48] In May 2019, the group aligned with the strict European Union standards for animal welfare[49][50] and banned models under 18 from its shows and photo shootings.[51] The French President Emmanuel Macron mandated François-Henri Pinault to promote an industry coalition for sustainability.[52] In August 2019, Kering presented the Fashion Pact during the 45th G7 summit, an initiative signed by 32 fashion firms committing to concrete measures to reduce their environmental impact.[53] In October 2020, the Fashion Pact virtually announced its one-year progress at the Copenhagen Fashion Summit, revealing that 80 percent of its members have sped up company-wide sustainability efforts to date.[54]

Controversy

In February 2019, French prosecutors opened an investigation over possible laundering of tax-fraud funds.[55] Kering’s Yves Saint Laurent and Balenciaga brand’s profits are expected face scrutiny in France.[55]

In 2019, Italian authorities completed an investigation of back taxes and a settlement of 1.25 billion-euro ($1.4 billion) was reached in Italy.[55] The Italian investigation focused on a Swiss subsidiary of Kering from 2011 through 2017, which was a Swiss logistics center, that shifted billed business, where it paid lower tax rates than it would have in Italy.[55]

Activities

Description

Kering is an international group based in Paris (France) specialized in on luxury and fashion goods. Its portfolio includes luxury brands specialized in the design, the making and the sale of fine products, especially in the leather goods, shoes, ready-to-wear, watches and jewellery sectors.[56] Kering Eyewear (30%-owned by Richemont) produces glasses for the luxury sector.

Kering's headquarters are located in the former Hopital Laennec in the 7th arrondissement of Paris.[57] The parent holding company of Kering is Groupe Artémis. In 2019, Kering made 15.383 billion euros in revenue, +16,2% from the previous year. The group has 30.956 employees and 1.381 stores. Its brands Gucci, Saint Laurent et Bottega Veneta generated 84% of the group's revenue. The leather goods, shoes, and ready-to-wear products represent 87% of the group's revenue.[56]

Brands
BrandWith Kering sinceCountry
Gucci1999Italy
Yves Saint Laurent1999France
Boucheron2000France
Bottega Veneta2001Italy
Balenciaga2001Spain
Alexander McQueen2001UK
Brioni2011Italy
Girard-Perregaux2011Switzerland
JeanRichard2011Switzerland
Qeelin2012Hong Kong SAR, China
Pomellato2012Italy
Dodo2012Italy
Tomas Maier2013Germany
Christopher Kane2014UK
Ulysse Nardin2014Switzerland

Governance

Board of Directors

Executive Committee
  • François-Henri Pinault - Chairman and CEO
  • Jean-François Palus - Group Managing Director
  • Francesca Bellettini - President and CEO Saint Laurent
  • Marco Bizzarri - President and CEO Gucci
  • Grégory Boutté : Chief Client and Digital Officer
  • Cédric Charbit : CEO Balenciaga
  • Marie-Claire Daveu - Chief Sustainability Officer and Head of Institutional Affairs
  • Valérie Duport - Chief Communications and Image Officer
  • Jean-Marc Duplaix - CFO
  • Béatrice Lazat - VP Human Resources
  • Bartolomeo Rongone - President and CEO Bottega Veneta
  • Roberto Vedovotto - CEO Kering Eyewear

Financial data
Results (in € millions)
Year 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Sales 17 931 17 761 20 201 16 525 11 008 12 227 9 736 9 748 10 037 11 584 12 385 15 478 13 665.2 15 883.3
EBITDA 1 540 2 096 2 140 1 790 1 649 1 911 2 067 1 750 1 647 1 886 2 948 3 943.8 4 778.3
Net results 680 1 058 924 985 965 986 1 048 50 528.9 696 814 1 786 3 714.9 3 211.5
Net debt 3 461 6 121 5 510 4 367 4 000 3 395 2 491 3 443 4 679 4 371 3 049
Market data
Years 2007 2008 2009 2010 2011 2012 2016 2017 2018
Number of shares (in millions) 128 128.4 126.5 126.8 127 126.2 126.2 126.3 126.3
Market capitalizations (in millions of Euros) 14089 5897 10 661 15 093 14 034 17 764 26,935 49 628 63,203
Number of daily transactions 692 022 1 116 420 701 105 453 415 385 265 317 960
  • Date of IPO: 25 October 1988, Second Marché
  • Shares listed on the Bourse de Paris
  • Member of the CAC 40 index since 9 February 1995
  • Nominal value = euro
  • Main shareholders: Artémis 40.8%

In September 2018, Kering joined the STOXX Europe 50 index.[61] In November 2018, the group announced the share repurchase of 1% of its share capital.[62]

See also

References
  1. Annual results 2019
  2. Guardian Staff (3 April 1999). "From timber merchant to corporate axeman". The Guardian. ISSN 0261-3077. Retrieved 25 August 2019.
  3. "Gucci Group Agrees to Sell 40% Stake to French Retailer". Latimes.com. 20 March 1999. Retrieved 24 July 2017.
  4. Sri Ramakrishnan (16 November 1999). "Gucci to Buy Parent Of Yves Saint Laurent". Washingtonpost.com. Retrieved 24 July 2017.
  5. "Gucci fades on court ruling". Cnn.com. 27 May 1999. Retrieved 24 July 2017.
  6. McNeil, Peter; Riello, Giorgio (19 May 2016). Luxury: A Rich History. Oxford University Press. p. 256. ISBN 9780191640278.
  7. Suzanne Kapner (23 March 2004). "PPR moves to buy last 30% of Gucci Group". Nypost.com. Retrieved 24 July 2017.
  8. Joshua Levine (15 February 2013). "The Man Behind the Curtain". Nytimes.com. Retrieved 24 July 2017.
  9. François Pinault just gave $109 million to help rebuild the Notre-Dame. Meet the French billionaire who owns Christie’s and founded the luxury giant behind Gucci
  10. Christina Passariello (8 November 2011). "PPR Buys Menswear Brand Brioni". Wsj.com. Retrieved 24 December 2013.
  11. Luisa Zargani, Miles Socha (24 April 2013). "Kering Acquires Pomellato". Wwd.com. Retrieved 24 July 2017.
  12. "PPR acquires majority stake in Chinese Qeelin". Fashiounited.com. 9 December 2012. Retrieved 24 July 2017.
  13. Ella Alexander (15 January 2013). "PPR Buys Majority Stake In Christopher Kane". Vogue.co.uk. Retrieved 24 July 2017.
  14. Elizabeth Doerr (30 July 2014). "Kering (Previously PPR, Gucci Group) Acquires Ulysse Nardin". Forbes.com. Retrieved 24 July 2017.
  15. Sara Gay Forden, Jacqueline Simmons (20 June 2006). "As sales fall, PPR works to unload Printemps". Nytimes.com. Retrieved 24 July 2017.
  16. PPR Looks to Sell Conforama
  17. Toyota Tsusho to buy PPR stake in CFAO
  18. PPR says in talks to sell La Redoute by year-end
  19. "Puma acquires Cobra Golf and announces becoming Cobra-Puma Golf". Worldgolf.com. 10 May 2010. Retrieved 24 July 2017.
  20. Chris V. Nicholson (2 May 2011). "PPR to Buy Volcom, a Sportswear Maker". Nytimes.com. Retrieved 24 July 2017.
  21. "PPR to Show Breton Roots With Rebranding as Kering". Retrieved 9 November 2018.
  22. Anthony DeMarco (18 June 2013). "It's Official: PPR Becomes Kering; Reportedly In Talks To Acquire Richard Mille". Forbes.com. Retrieved 24 July 2017.
  23. Manuela Mesco, Fashion Executive Sets About Fixing Gucci, The Wall Street Journal, 25 February 2015
  24. George Arnett, Gucci on track to hit €10 billion in 2020, Vogue, 26 April 201
  25. Maura Brannigan (10 February 2017). "10 months after Hedi Slimane's departure, Yves Saint Laurent is still Kering's big money-maker". Fashionista.com. Retrieved 24 July 2017.
  26. Jess Cartner-Morley (2 October 2016). "Demna Gvasalia reinvigorates Balenciaga with strategic disrespect". Theguardian.com. Retrieved 24 July 2017.
  27. Radhika Seth, Daniel Lee Appointed Creative Director Of Bottega Veneta, Vogue, 15 June 2018
  28. Deeny, FashionNetwork com,Godfrey. "Kering inks eyewear partnership with Cartier". FashionNetwork.com. Retrieved 7 April 2019.
  29. Dominique Muret, Kering Eyewear creates €500 million business in five years, Fashion Network, 7 October 2019
  30. Ben Stevens (29 March 2018). "Kering offloads entire stake in Stella McCartney". Retailgazette.co.uk. Retrieved 19 June 2018.
  31. Beth Wright (16 May 2018). "Kering officially spins off Puma". Just-style.com. Retrieved 19 June 2018.
  32. "ABG grabs Volcom from Kering". Retail Dive. Retrieved 7 April 2019.
  33. Comment Kering est devenu un "pure player du luxe"
  34. Elizabeth Paton (25 January 2017). "François-Henri Pinault, Kering Chief, on Why Green Is the New Black". Nytimes.com. Retrieved 24 July 2017.
  35. Kate Abnett (3 May 2016). "Kering Goes Public with Sustainability Report, Revealing Progress and Pain Points". Businessoffashion.com. Retrieved 24 July 2017.
  36. Libby MacCarthy (26 January 2017). "Kering to Transform Luxury Industry with Next-Gen Sustainability Strategy". Sustainablebrands.com. Retrieved 24 July 2017.
  37. Hughes Huw, Kering group commits to full carbon neutrality, Fashion United, 24 September 2019
  38. MIL: A laboratory for more sustainable materials, Kering, 20 August 2019
  39. Monica Karski (17 September 2015). "Kering still industry leader in Dow Jones Sustainability Indices". Fashionnetwork.com. Retrieved 24 July 2017.
  40. Geoghegan, 24 January 2018By Jill. "Kering named most sustainable luxury fashion firm". Drapers. Retrieved 7 April 2019.
  41. Lorelei Marfil (23 January 2018). "Kering Named Most Sustainable Global Corporation". Wwd.com. Retrieved 20 June 2018.
  42. Roxanne Robinson, Kering Foundation Celebrates 10th Anniversary of Supporting #MeToo-Related Causes, Hollywood Reporter, 28 November 2018
  43. Chime For Change Campaign, Beyoncé Launch Initiative To Help Girls Run The World (VIDEO), Huffpost. 28 February 2013
  44. Gill Flora, The White Ribbon campaign is a cause you should support, British GQ, 8 March 2020
  45. Spencer, Mimosa (7 May 2019). "Kering, Cannes Film Festival Renew Women in Motion Program". WWD. Retrieved 25 August 2019.
  46. Diderich, Joelle (13 March 2019). "Kering Partners With Rencontres d'Arles Photography Festival". WWD. Retrieved 10 April 2019.
  47. Abdulla, Hannah (15 October 2018). "Pioneering partnership on traceable organic cotton for Kering". Just-Style. Retrieved 16 October 2018.
  48. Marjorie van Elven (10 December 2018). "Kering teams up with Plug and Play to launch sustainability award in China". Fashionunited.uk. Retrieved 8 January 2019.
  49. "French fashion group Kering sets guidelines on animal welfare". Reuters. 13 May 2019. Retrieved 25 August 2019.
  50. Kering to Push Stricter Animal Welfare Standard Worldwide, Business of Fashion, 13 May 2019
  51. Pinnock, Olivia. "Kering Group Bans Working With Models Under 18". Forbes. Retrieved 25 August 2019.
  52. Campbell, Maeve (17 May 2019). "Macron hires Kering CEO to improve sustainability of luxury fashion". living. Retrieved 25 August 2019.
  53. Guilbault, Laure & Kent, Sarah, Kering Chief to Present Industry Sustainability Pact to G7, Business of Fashion, 23 August 2019
  54. Roshitsh, Kaley (12 October 2020). "Where the Fashion Pact Stands, One Year In". WWD. Retrieved 12 October 2020.
  55. "Gucci Owner Investigated by French Authorities Over Taxes (1)". www.bloomberglaw.com. Retrieved 17 December 2020.
  56. "Recurring operating income breakdown by activity (2016)". Kering.com. Retrieved 24 July 2017.
  57. Kering, Balenciaga Unveil Tranquil Headquarters — Lavender Included
  58. "Power Moves | Kering Adds to Board of Directors, Vanity Fair Italia Names New Editor-In-Chief". The Business of Fashion. 8 November 2018. Retrieved 9 November 2018.
  59. Singh, Prachi. "Kering board nominates Ginevra Elkann as Director". Retrieved 9 November 2018.
  60. Prachi Singh (18 December 2018). "Héloïse Temple-Boyer replaces Patricia Barbizet as board director at Kering". Fashionunited.uk. Retrieved 8 January 2019.
  61. Singh, Prachi (27 September 2018). "Kering shares enter Stoxx 50 European Index". Fashion United. Retrieved 16 October 2018.
  62. "Why Kering Is Buying Back Its Shares". The Business of Fashion. 29 October 2018. Retrieved 9 November 2018.

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