The great Kering shake-up begins
Luca de Meo's "ReconKering" plan, Trump's Swiss tariff deal disgusts politicians and a grim story about the secondary luxury market's links to money laundering
In this week’s Dark Luxury news round-up
Tod’s is the latest luxury brand to investigated for labour exploitation
Kering’s consultancy-led reckoning begins
MPs “disgusted” after Trump slashes Swiss tariffs after gifts
London’s New Bond Street beats Manhattan’s Fifth Avenue
The end of mushroom leather?
Kering’s 18-month crash diet
Luca de Meo turnaround vision at Kering, dubbed “ReconKering” (surely the worst corporate pun in decades) aims to reduce the conglomerate’s “over-dependency” on Gucci, which accounts for half of group sales and two-thirds of profits. In the internal memo seen by the FT’s Adrienne Klasa, de Meo outlines his plan to give his team 18 months to resize operations and return all brands to growth, with “top financial performance” aimed to be restored within 36 months.
Every Kering brand is now undergoing so-called “strategic reviews” led by consultancies Bain and BCG, with loss-making Alexander McQueen likely to be the first to shed jobs. Puck News reported earlier that the brand’s London headquarters could see a 20 per cent staff reduction with a potential sale on the cards. De Meo’s “First 100 day no-brainer” actions include reducing excess inventory, rethinking products and pricing brand by brand, reviewing marketing spend and renegotiating supplier terms to reduce debt and financing costs. It all sounds like typical consultancy fare for cutbacks. Kering’s shares are up 68 per cent in the last six months, rising twice as fast as LVMH’s over that period. (FT)
De Meo is also preparing a new investment arm called House of Dreams, according to documents seen by Reuters. The unit will scout and take stakes in emerging brands across “experiential tech”, Indian craftsmanship and “culture-led” Chinese luxury. The idea reportedly mirrors an earlier idea de Meo had at Renault. (CNBC)
Zegna has kicked off its succession plan, elevating fourth-generation heirs Edoardo and Angelo Zegna to co-CEOs of the flagship brand while longtime CFO Gianluca Tagliabue becomes group CEO. (Reuters)
JP Morgan upgraded Moncler and Ferragamo while downgrading Burberry in its latest analyst rating changes. It says engagement with Burberry among consumers is fading and the next stage of the turnaround plan looks like it will be harder to execute than the initial stages (with those fun ads featuring Olivia Colman.) (Investing.com)
TikTok shop is now offering handbags that sell for up to $11,000. (Bloomberg News)
Tod’s is the latest luxury brand to be investigated for labour exploitation
Italian authorities are investigating luxury shoemaker Tod’s over its labour practices and are seeking a six month advertising ban as part of the probe. It’s the latest in Italy’s ongoing crackdown on the luxury sector’s employment conditions, following similar investigations into other luxury fashion brands Dior, Armani and Valentino. The regulatory scrutiny marks an escalation in how seriously Italian officials are taking these violations by targeting the brand’s marketing channel. Tod’s is reviewing the allegations. (Bloomberg)
Why jewellery is outperforming the rest of luxury
“Shoppers see luxury jewelry offering better value for money than clothing or handbags”, reports the WSJ’s Carol Ryan in this analysis of how wealthy Americans are spending their money in luxury. Stock price booms are driving shoppers to Richemont and Cartier at the expense of handbags from Chanel and Dior. Ryan calls this a “K-shaped” economy, where the gap continues to widen between the richest who continue to spend and everyone else, and so-called “aspirational” shoppers, who are pulling back. (WSJ)
A tale of two handbags
The battle between LVMH and Hermès is playing out on the arm of one of the world’s top luxury analysts at the 2025 FT Business of Luxury Summit. Can you guess which £4,500 bag broke after a month, and which old stalwart is still going strong after 20 years? And which stock is on the rise and which one is currently stagnating? Scroll down to find out.
London’s New Bond Street is the world’s most expensive retail destination
It’s hard to reconcile mainstream views of the UK economy’s troubles with headlines like this: “London’s Bond Street becomes world’s priciest retail destination”. Rents are up 22 per cent in the past year to surpass Milan’s Via Montenapoleone and Manhattan’s Fifth Avenue. The rise has been driven by intense competition over the 50-metre stretch between Clifford Street and Burlington Gardens, which is no doubt currently filled with street crooners and gaudy and questionably parked Lamborghinis. Italian and French-owned brands such as Prada, Richemont, Givenchy and Van Cleef & Arpels are scrambling for space while British brands Fenwick and Smythson have moved out of the area. Is that another example of Britain paying the price for ignoring luxury? (FT)
Britain pays the price for ignoring luxury
The UK's Labour Party has been locked in a fight over welfare cuts this week, with backbench MPs threatening a rebellion over cuts to disability benefits. For years, another fiscal argument has been simmering: whether to restore tax‑free shopping for tourists, a policy abolished by the Treasury in January 2021.
Labour cuts off luxury cars from disability scheme
Whatever you think of the UK’s Motability scheme which leases cars to 860,000 disabled people, dropping premium car brands such as BMW, Mercedes, Audi, Lexus and Alfa Romeo can’t be great for the luxury car makers’ bottom line. “Higher-end vehicles account for about 50,000 of the vehicles leased by the scheme”, according to the BBC, with customers paying the additional cost for nicer models. (BBC News)
The timing couldn’t be worse for UK car manufacturing, which plummeted 24 per cent in October in the wake of the Jaguar Land Rover cyber attack. (Autocar)
Golden handshake
Earlier this month, a delegation of Swiss businessmen brought gifts of an engraved gold bar and a gold Rolex desk clock to honour Trump’s presidency. Rolex CEO Jean-Frédéric Dufour described the clock as “a modest, refined expression of traditional Swiss watchmaking”. A few weeks later, Trump slashed Swiss import tariffs from 39 per cent to 15 per cent.
This week, Italian MEP Pasquale Tridico said he was “disgusted” by the golden gifts and Lisa Mazzone, president of Switzerland’s Green party, said it showed Trump’s “corrupt logic had poisoned the Swiss elite”. A White House spokesperson denied any link between the gifts and the tariff deal, pointing to Switzerland’s pledge of “$200bn to make and hire in America”. Sure. (The Guardian)
Simon Kuper’s opinion piece about “how flattery became a big, beautiful industry”, in which he argues that “the spheres of autocracy, luxury and wealth management are merging” could explain a lot about the current state of the world. (FT)
Money laundering and the secondary luxury market
A London robbery trial has exposed how the secondary market for luxury goods can serve as a potential conduit for money laundering. The criminal case centred on 247 Kettles, a luxury watch “store” in Richmond that had no shop front, operated from the third floor of serviced offices and advertised on social media. The court heard allegations that the business was run by caravan park millionaire Maurice Sines who, the Irish Sun reports, previously had a close association with Ireland’s most notorious criminals, the Kinahan Cartel, and his son Fred, as “a front for organised crime”.
Store manager Oliver White, 27, was tied up during a raid where watches worth £1.1 million were taken. White was found dead the next day after an “intense” meeting with the two legal owners and Fred Sines, who was convicted earlier this year for trying to sell the £4.3 million gold toilet stolen from Blenheim Palace in 2019. Three men were convicted of conspiracy to rob. The watches have never been recovered. (Irish Sun)
Can AI scale with luxury?
Luxury brands are struggling to scale their deployments of artificial intelligence, in part because many AI tools conflict with what luxury is supposed to be about, according to an analysis by Jing Daily. Heritage luxury brands which have built their reputations on craftsmanship, exclusivity and the human touch struggle to reconcile that with AI’s associations with mass production, automation and efficiency. The analysis suggests luxury houses are caught between the potential benefits of AI and the fear that adopting it too aggressively will make them look like just another tech-enabled retailer. (Jing Daily)
Pinstripes and penance
Spare a thought for Max Potter, a 29-year-old luxury suit salesman in London. His employer, Tennessee-based Tom James, which sells suits for as much as £25,000, gave him an ultimatum after bosses said he had drank too much at a Florida conference: resign, or abstain from alcohol, attend Alcoholics Anonymous meetings and confess his sins to an Indianapolis-based pastor named Father Bob.
Potter initially said yes and submitted to “counselling phone calls” with the former pastor, who Potter said was reporting back to his bosses. Potter quit, and a We know about this because of a High Court case which has ruled that the company could not impose a 12 month no-compete order on Potter, who is now working as an independent suit salesman. (The Times)
The end of mushroom leather?
The sustainable fabrics market is having a bad time. MycoWorks, the mushroom leather company which made a bag for Hermès in 2021 and was supposed to change fashion with its fungus-based alternative to animal hides is facing financial difficulties. The entire alternative materials sector is struggling as luxury brands retreat from sustainability. “Ultimately, the long-term success of these start-ups might boil down to [...] regulatory pressure on brands”, writes Annachiara Biondi. (FT)
EU sustainability rules are splintering, with Italy, France and others creating incompatible extended producer responsibility (EPR) schemes. The uncertainty reinforces why alternative-material start-ups like mushroom leather makers are struggling. Without clear, unified regulation or pressure on brands, the promised market for greener materials will just keep stalling. (Vogue Business)
How the super-rich use luxury goods to stop their kids from fighting
Ever wondered how the ultra-wealthy keep their kids in line? Trusts. Very specific trusts. Bank of America reportedly worked with one family that set up a $75 million fund specifically for a daughter’s equestrian hobby, covering horses which can cost more than $100,000 each, boarding, medical care, instructors and insurance. Another family prioritised travel, with a trust providing $300,000 annually just for vacations. One trust mentioned in the WSJ story included “his wife’s luxury Hermès handbag and is designed to be passed down to two sons when they reach certain ages”, all designed to prevent future infighting between the siblings. (Wall Street Journal)
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