By Andrea Figueras


French luxury group Kering expects to more than double its profit margin in the coming years as it pushes ahead with a plan to move on from a period of weakening sales, particularly at foundering flagship Gucci.

Kering said it will boost financial discipline and operational efficiency across the group, with a focus on refreshing creative direction and product lineups at its brands to foster their appeal.

The plan, outlined at an investor day Thursday, fleshes out a turnaround begun with the appointment last year of a new group chief executive, longtime autos executive Luca de Meo.

In the medium term, Kering wants to book revenue growth faster than that of its peers, alongside an ambitious target to more than double the 11.1% margin it booked in its recurring operations last year.

"The road ahead is demanding, but our direction is now firmly set," de Meo said at Thursday's meeting.

Paris-based Kering has been suffering from weaker demand in recent years, with Gucci notable for struggling more than many peers in a luxury-goods business enduring a downslide from a pandemic-era boom in spending on high-end goods. The storied Italian label is pursuing a revamp strategy under a new executive and creative leadership, but continued to book a sizeable decline in sales in the first months of 2026.

Much will hinge on the pace of Gucci's turnaround, Citi luxury analyst Thomas Chauvet wrote in a note to clients. "One key question is how quickly Gucci can regain center stage and return to healthy growth, as the luxury sector continues to face a mix of structural and cyclical headwinds," he said.

Kering said it is reshaping Gucci's product lineup, with a strengthened leather-goods offer and more coherent ready-to-wear, shoes and jewelry. Changes to Gucci's product will be supported by higher quality standards.

In an earnings call earlier this week, finance chief Armelle Poulou said that the company saw a good response to designs from new head designer Demna Gvasalia, who was moved across from stablemate Balenciaga last year.

Gucci has a particular challenge in China, said the brand's CEO, Francesca Bellettini, also recently installed. The fashion house needs to restore brand desirability among Chinese buyers, Bellettini said.

"From being high we went low," she said, adding that the brand has too many stores in China and that unproductive boutiques will be closed.

"There is work to do, but we are on the right track," Bellettini said.


Write to Andrea Figueras at andrea.figueras@wsj.com


(END) Dow Jones Newswires

04-16-26 0749ET