Kering’s CEO on Finding the Elusive Formula for Growing Acquired Brands

Reprint: R1403A

When Pinault stepped into the top job at Kering (formerly PPR), in 2003, he faced a key question: Should he leave things as they had been under his father, who had built a conglomerate of eclectic businesses, or take them in a new direction? He felt that the company should become more international, more growth oriented, and more profitable—and that it should build on its ownership of Gucci Group to create a strong position in the global luxury market.

Kering began a series of acquisitions that included Alexander McQueen, Saint Laurent, and Bottega Veneta, and helped its brands develop their own retail store networks. It set out to pair creative directors—who retained a high degree of control—with strong and complementary CEOs. And it introduced operational synergies, coordinating sourcing and creating two product development centers. The transformation of the business has made the company much smaller but far more focused. Since 2003, its profits have risen by about 40%.