Kering looks to double profits as it unveils ambitious turnaround plan to revive Gucci

Kering said Thursday it aims to double profitability and revive its flagship brand Gucci as it announced its highly anticipated strategy to get the company back on track after a year-long luxury slump that hit it harder than its competitors. 

CEO Luca de Meo announced the strategy seven months after taking over the reins, during which investors' optimism has mounted that he'll be able to turn the legacy conglomerate around. 

"In a nutshell, a model that worked for a decade, is no longer effective for us," he said during the company's Capital Markets Day in Florence on Thursday. "Growth will come first from gaining share, restoring pricing power, and executing better than our peers."

Shares fell 2% early Thursday. 

The strategy, dubbed "ReconKering," includes more than doubling the company's 2025 recurring operating margin of 11.1% while boosting its return on capital employed to over 20% in the midterm.

Kering also aims to refurbish or relocate two-thirds of its Gucci store network, reduce selling space by 20% and outlets by a third, as well as reduce inventory by 1 billion euros ($1.18 billion) over the next 12 months. 

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