Kering

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Kering
Société Anonyme
Traded as EuronextKER
CAC 40 Component
Industry Retail and Fashion design
Founded 1963; 54 years ago (1963)
Founder François Pinault
Headquarters Paris, France
Key people
François-Henri Pinault
(Chairman and CEO)
Products Luxury goods
Sporting goods
Revenue €12.385 billion (2016)
€1.886 billion (2016)
Profit €1.282 billion (2016)
Total assets €24.139 billion (2016)
Total equity €11.964 billion (2016)
Number of employees
35,877 (2016)
Subsidiaries
Website kering.com

Kering (founded in 1963) is an international luxury group based in Paris. It owns luxury brands including Gucci, Yves Saint Laurent, Balenciaga, Alexander McQueen, Bottega Veneta, Boucheron, Brioni, as well as Puma and Volcom in its Sport & Lifestyle portfolio.

Kering has been headed by François-Henri Pinault since 2005, has been quoted on Euronext Paris since 1988, and has been a constituent of the CAC 40 index since 1995.

History[edit]

Building a retail empire with wood[edit]

In 1962, with a loan from his family and the bank, François Pinault opened the Établissements François Pinault in Brittany (France) specialized in timber trading. The company grew organically and through successful acquisitions; in 1988, Pinault SA was listed on the Paris Stock Exchange, multiplying the group’s financial power.

In 1989, it purchased 20% of CFAO, a French distribution conglomerate active throughout Africa; in 1990, Pinault SA 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 the group’s identity with its new activities, it was renamed Pinault-Printemps-Redoute in 1994.

Offloading retail assets to invest in luxury[edit]

Logo of the company Pinault-Printemps-Redoute (PPR).

In 1999, a major acquisition changed the course of the group’s strategy; in a bold and unexpected move, Pinault-Printemps-Redoute purchased a controlling 42% stake of the Gucci group for $3 billion.[1] Through the Gucci deal, Pinault-Printemps-Redoute also acquired the brand Yves Saint Laurent,[2][3] it confirmed this new strategy with its following acquisitions, which included the French high-jewelry house Boucheron (2000), the Italian leather goods maker Bottega Veneta, and the fashion house Balenciaga (2001). In 2001, Pinault-Printemps-Redoute also signed strategic partnerships with ex-Givenchy fashion designer Alexander McQueen and with Stella McCartney.[4]

With a new strategy for the group, Pinault-Printemps-Redoute offloaded its assets in the retail sector one after the other: Pinault Bois et Matériaux, upon which the whole group developed and grew, was acquired by the British group Wolseley in 2003.[5]

In 2003, François Pinault handed over the helm of Artémis, the family holding that controls Pinault-Printemps-Redoute and other assets (Château Latour, Christie’s...) to his son François-Henri. In 2004, Pinault-Printemps-Redoute acquired almost all of the remaining shares of the Gucci group to reach a 99,4% ownership of the Italian luxury holding;[6] in 2005, François-Henri Pinault chose a hands-on approach to managing Pinault-Printemps-Redoute and decided to take over the position of CEO.[7] The group officially changed its name to PPR.

The divestment of the group’s retail assets continued: Le Printemps (2006),[8] Conforama (2011), CFAO and Fnac (2012), and La Redoute (2013); in the meantime, PPR acquired the Sowind Group (owner of Swiss high-end watchmaker Girard-Perregaux) and the Italian bespoke tailor Brioni (2011),[9] the Italian group Pomellato (Pomellato and Dodo jewelry brands),[10] the Chinese jeweler Qeelin (2012),[11] the fashion designer Christopher Kane,[12] and luxury watch manufacturer Ulysse Nardin (2014).[13]

PPR also developed a Sport & Lifestyle portfolio with the acquisition of Puma in 2007,[7] Cobra Golf in 2010,[14] and Volcom in 2011.[15]

Kering, a new luxury powerhouse[edit]

On March 22, 2013, PPR changed its name to Kering in order to fully achieve the group’s shift towards luxury goods. Pronounced "caring", the new name is a reference to the Pinault’s region of origin, Brittany, where "Ker" means home, the new logo has an owl as its emblem, a bird that can rotate its head 270 degrees giving it extraordinary vision, and François Pinault’s favorite animal.[16][17]

Among the leaders of the luxury sector, Kering has kept its portfolio of brands dynamic by keeping these brands relevant to the market; in December 2014, Alessandro Michele, an unknown accessories designer, was named creative director of Gucci, and quickly revitalized the brand’s creativity, fashion relevance, and profitability.[18][19] In 2015, following Hedi Slimane’s four-year success at the creative helm of Yves Saint-Laurent, Kering named a new creative director, Anthony Vaccarello, to pursue the evolution of the brand while maintaining its growth pace;[20] in October 2015, Kering named Georgian-born designer Demna Gvasalia as creative director of Balenciaga, quickly turning the house into a performing brand on the fashion scene.[21]

In 2016, mainly lifted by Gucci and Yves Saint Laurent’s sales, Kering’s income rose 14.5% and its revenue rose 8.1%.[22] From July 2016 to April 2017, the price of Kering’s stocks rose 85%, reaching 284€.[19]

Description[edit]

Kering is organized into two sections: Luxury and Sport & Lifestyle.

The Luxury portfolio includes brands specialized in the design, the making, and the sale, of luxury products, especially in the leather-good, shoe, ready-to-wear, watches and jewelry sectors. Ninety-four percent of the group’s operating income (2016) is generated by the following brands:[23]

The Sport & Lifestyle portfolio includes:

Commitments[edit]

Sustainability[edit]

In April 2012, Kering committed to a 4-year plan aiming to significantly reduce its impact on the environment, the group defined a set of quantifiable targets covering both environmental and social issues, and developed the Environmental Profit & Loss account (E P&L) to measure its progress.[24]

In September 2013, Kering was listed on the Dow Jones Sustainability Indices world and Europe, and was recognized as an industry leader in 2014 and 2015.[25]

Published in 2016, Kering’s sustainability report showed that Kering was able to control some supply/production chains more than others: while it reached 99% on its PVC-free goal, it only reached 15% on its goal to purchase its gold from verified "fairmined gold" providers, and 64% of its goal to purchase its leather from responsible and verified sources. Carbon emissions were reduced by 11%, waste output by 16% and water usage by 19%. Six thousand supplier audits were performed.[24] Kering then announced its new sustainability program, which targets a 40% reduction of its global environmental impact by 2025, a strategy aligned with the UN Sustainable Development Goals.[26][27]

En 2015, Kering co-produced Ice and the Sky by Luc Jacquet, a documentary film about Claude Lorius, one of the first scientists to show evidence of global warming.[28]

Kering Foundation[edit]

The Foundation is committed to defending women’s dignity and rights by combating violence against women and promoting women’s empowerment, since 2009, the Foundation has initiated 47 partnerships with NGOs and supported many social projects oriented towards women’s rights.

Many brands have their own philanthropic projects, which the Kering Foundation supports. Gucci, one of the Group's major brands launched its project Chime for Change, an international campaign led by actress Salma Hayek Pinault, then Frida Giannini, creative director of Gucci and Beyoncé Knowles, to raise funds for women’s emancipation focusing on education, health and justice.[29]

Every year since 2012, the Kering Foundation has contributed to the International Day for the Elimination of Violence against Women with the White Ribbon for Women campaign.[30]

Governance[edit]

Board of Directors[edit]

Executive Committee[edit]

Financial results[edit]

Sales and profits[edit]

Financial Data in euro millions
Year 2006 2007 2008 2009 2010 2011 2012[31] 2013[32] 2014[33] 2015 2016
Sales 17 931 17 761 20 201 16 525 11 008 12 227 9 736 9 748 10 037 11 584 12 385
EBITDA 1 540 2 096 2 140 1 790 1 649 1 911 2 067 1 750 1 647 1 886
Net results 680 1 058 924 985 965 986 1 048 50 528.9 696 814
Net debt 3 461 6 121 5 510 4 367 4 000 3 395 2 491 3 443 4 679 4 371

Market data[edit]

Market Data at 31 December
Years 2007 2008 2009 2010 2011 2012 2016
Number of shares (in millions) 128 128.4 126.5 126.8 127 126.2 126.2
Market capitalizations (in millions of Euros) 14089 5897 10 661 15 093 14 034 17 764 26,935
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%

See also[edit]

References[edit]

  1. ^ "Gucci fades on court ruling". Cnn.com. 27 May 1999. Retrieved 24 July 2017. 
  2. ^ "Gucci Group Agrees to Sell 40% Stake to French Retailer". Latimes.com. 20 March 1999. Retrieved 24 July 2017. 
  3. ^ Sri Ramakrishnan (16 November 1999). "Gucci to Buy Parent Of Yves Saint Laurent". Washingtonpost.com. Retrieved 24 July 2017. 
  4. ^ McNeil, Peter; Riello, Giorgio (19 May 2016). Luxury: A Rich History. Oxford University Press. p. 256. ISBN 9780191640278. 
  5. ^ Joanne Wallen (24 April 2003). "Ooh la la, Wolseley gets heavy in France". Citywire.co.uk. Retrieved 24 July 2017. 
  6. ^ Suzanne Kapner (23 March 2004). "PPR moves to buy last 30% of Gucci Group". Nypost.com. Retrieved 24 July 2017. 
  7. ^ a b Joshua Levine (15 February 2013). "The Man Behind the Curtain". Nytimes.com. Retrieved 24 July 2017. 
  8. ^ Sara Gay Forden, Jacqueline Simmons (20 June 2006). "As sales fall, PPR works to unload Printemps". Nytimes.com. Retrieved 24 July 2017. 
  9. ^ Christina Passariello (8 November 2011). "PPR Buys Menswear Brand Brioni". Wsj.com. Retrieved 24 December 2013. 
  10. ^ Luisa Zargani, Miles Socha (24 April 2013). "Kering Acquires Pomellato". Wwd.com. Retrieved 24 July 2017. 
  11. ^ "PPR acquires majority stake in Chinese Qeelin". Fashiounited.com. 9 December 2012. Retrieved 24 July 2017. 
  12. ^ Ella Alexander (15 January 2013). "PPR Buys Majority Stake In Christopher Kane". Vogue.co.uk. Retrieved 24 July 2017. 
  13. ^ Elizabeth Doerr (30 July 2014). "Kering (Previously PPR, Gucci Group) Acquires Ulysse Nardin". Forbes.com. Retrieved 24 July 2017. 
  14. ^ "Puma acquires Cobra Golf and announces becoming Cobra-Puma Golf". Worldgolf.com. 10 May 2010. Retrieved 24 July 2017. 
  15. ^ Chris V. Nicholson (2 May 2011). "PPR to Buy Volcom, a Sportswear Maker". Nytimes.com. Retrieved 24 July 2017. 
  16. ^ "PPR becomes Kering". Kering.com. 22 March 2013. Retrieved 24 July 2017. 
  17. ^ Anthony DeMarco (18 June 2013). "It's Official: PPR Becomes Kering; Reportedly In Talks To Acquire Richard Mille". Forbes.com. Retrieved 24 July 2017. 
  18. ^ Harriet Agnew (10 February 2017). "Kering reports strongest revenue growth since 2012". Ft.com. Retrieved 24 July 2017. 
  19. ^ a b Robert William (26 April 2017). "Gucci's Latest Revival Fueled by Sequins Rather Than Sex". Bloomberg.com. Retrieved 24 July 2017. 
  20. ^ 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. 
  21. ^ Jess Cartner-Morley (2 October 2016). "Demna Gvasalia reinvigorates Balenciaga with strategic disrespect". Theguardian.com. Retrieved 24 July 2017. 
  22. ^ Dominique Vidalon, Pascale Denis (10 February 2017). "Gucci, Yves Saint Laurent shine for Kering". Reuters.com. Retrieved 24 July 2017. 
  23. ^ "Recurring operating income breakdown by activity (2016)". Kering.com. Retrieved 24 July 2017. 
  24. ^ a b Kate Abnett (3 May 2016). "Kering Goes Public with Sustainability Report, Revealing Progress and Pain Points". Businessoffashion.com. Retrieved 24 July 2017. 
  25. ^ Monica Karski (17 September 2015). "Kering still industry leader in Dow Jones Sustainability Indices". Fashionnetwork.com. Retrieved 24 July 2017. 
  26. ^ Elizabeth Paton (25 January 2017). "François-Henri Pinault, Kering Chief, on Why Green Is the New Black". Nytimes.com. Retrieved 24 July 2017. 
  27. ^ Libby MacCarthy (26 January 2017). "Kering to Transform Luxury Industry with Next-Gen Sustainability Strategy". Sustainablebrands.com. Retrieved 24 July 2017. 
  28. ^ Cajsa Lykke Carlson (8 October 2015). "Kering Group co-produces new film "Ice & Sky"". Fashionnetwork.com. Retrieved 24 July 2017. 
  29. ^ "Chime For Change Campaign, Beyoncé Launch Initiative To Help Girls Run The World". huffingtonpost.com. 2013-01-03. Retrieved 2013-01-03. 
  30. ^ Josh Lee (18 November 2016). "Why you should support the White Ribbon campaign". Gq-magazine.co.uk. Retrieved 24 July 2017. 
  31. ^ "Group Key Figures". Kering. 2012-12-31. Retrieved 2013-12-24. 
  32. ^ "Kering : Press Release : 2013 Results" (PDF). Kering.com. Retrieved 2014-03-01. 
  33. ^ Anne-Sophie Castro (17 February 2015). "Kering multiplie son bénéfice par dix en 2014". Fashionunited.fr (in French). Retrieved 24 July 2017. 

External links[edit]