What: Facing a sharp drop in profits and rising debt, Kering’s new CEO Luca de Meo is tasked with restructuring the group, expanding in beauty, and navigating a broader luxury sector reset.

Why it is important: This transition exemplifies the luxury sector’s “great reset,” as major players overhaul leadership, streamline operations, and pursue new growth avenues to remain competitive. In the case of Kering, the steep slowdown at Gucci and Balenciaga have greatly impacted luxury department stores business.

Kering’s leadership handover to Luca de Meo comes at a critical juncture, as the group contends with a more than 50% drop in operating profit over two years and debt swelling to over €10 billion. De Meo, renowned for his turnaround expertise in the automotive sector, inherits a mandate to rationalise costs, reduce debt, and reposition brands such as Gucci, Balenciaga, and McQueen amid a fiercely competitive luxury market. The group’s strategy includes tough decisions on cost control and brand reorganisation, while also advancing its push into beauty and considering further acquisitions like Valentino. Investor optimism has been buoyed by de Meo’s appointment, with shares rising 24% since his nomination, but the challenges remain formidable. Kering’s approach reflects a wider industry reset, with luxury conglomerates embracing external leadership, digital innovation, and operational efficiency to counteract declining demand and evolving consumer expectations. The coming months will test whether de Meo’s vision and restructuring can restore Kering’s momentum and secure its place among the sector’s leaders.

IADS Notes: Kering’s appointment of Luca de Meo as CEO in June 2025 signals a strategic shift toward external expertise and operational transformation, mirroring a wave of leadership changes across luxury retail since late 2024. The group’s intensified austerity measures and double-digit sales declines, reported in October 2024 and April 2025, underscore the urgency of cost control and brand repositioning. Kering’s expansion in beauty aligns with a sector-wide trend of leveraging beauty lines for growth, while the broader “great reset” in luxury retail—evident in the Saks Global consolidation and restructuring—frames the group’s current transformation efforts.

Inside Kering’s changing of the guard