Luca de Meo, CEO of Kering, announced a major move to decrease the company’s reliance on Gucci with the help of its latest investment arm, “House of Dreams.” This is part of the CEO’s latest series of big changes to identify new revenue streams while also not depending on the legacy fashion house.
The Kering CEO attempts to restructure the company’s portfolio by introducing a new unit while reducing expectations from Gucci. The luxury fashion label suffered a significant decline in its operating profit by 52 per cent, which dropped to approximately €500 million.
In the meantime, Gucci’s revenue dropped by 26 per cent to roughly €3 billion. The financial circumstances of the legacy fashion brand have thus motivated the CEO of Kering to consider reorienting the fashion house’s revenue models.
Kering CEO Luca de Meo Wants to Trim Reliance on Gucci
Luca de Meo, the new CEO of Kering, has decided to introduce a new unit to look for up-and-coming fashion labels to make investments in. Titled “House of Dreams,” the unit is expected to reduce Kering’s dependence on Gucci. Given the latter’s financial struggles this year, de Meo’s plan aims at seeking more efficient modes of revenue while continuing to remain as one of the most influential luxury houses across the world.
According to the latest report by Reuters, “The plan, shared in a memo with senior staff in October and previously unreported, gives insight into de Meo’s wider strategy to revamp the $20 billion luxury conglomerate ahead of a much-awaited investor presentation next spring.” The CEO has expressed his interest in exploring the areas of “experiential tech, Indian craftsmanship and “culture-led” Chinese luxury” through their latest unit.
In the same plan, de Meo prioritized the need to boost the brand’s growth and provide support to its existing labels. Simultaneously, the Kering CEO wants the company to be welcoming of new innovations in fashion design, technology, business models and strategies, among others.
Could Luca de Meo’s move indicate a major turnaround in Fashion?
The former Renault CEO is known for his phenomenal strategies to revitalize the company portfolio. During his tenure as CEO of Renault, Luca de Meo brought in a swift wave of changes that helped them recover from historic losses, boosted profitability to a record 7.6 per cent, and gave primacy to cost-cutting. His multifacted approach to brand transformation helped Renault create a big impact on the market. Similarly, Kering might follow a path akin to Renault’s under de Meo’s leadership.
Gucci owner Kering said it has agreed to sell its beauty business to L'Oreal for $4.66 billion, as new CEO Luca de Meo moves to tackle the luxury group's high debt and refocus on its core fashion business pic.twitter.com/N5bF4hdPMj
— Reuters (@Reuters) October 20, 2025
One of his first major steps after joining Kerig has been the sale of Gucci’s beauty line to L’Oreal for a whopping $4.6 billion. As per the Reuters report, the French luxury group chose to head in this direction towards the end of October this year. This was done in order to tackle Kering’s “high debt and refocus on its core fashion business.” Taking this U-turn was indeed a pivotal decision for the chief executive to steer the company towards a more fashion-centric endeavors.
As Kering prepares to launch “House of Dreams,” all eyes will be on de Meo to bring up the luxury group from financial distress in order to lay emphasis more on bringing innovations to the world of fashion while also building flexible yet strong revenue streams for Kering to thrive in the years to come.
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