Kering's Gucci turnaround plan

PARAGRAPH 1 --- What happened: Kering, the luxury goods conglomerate, is facing headwinds due to the loss of momentum at its core brand, Gucci. The company's profitability has been hit, with margins collapsing. Kering's response, 'ReconKering', aims to double profitability and revive Gucci. CEO Luca de Meo presented this turnaround plan at the Capital Markets Day in Florence, outlining ambitious revenue targets for 2026.

PARAGRAPH 2 --- Market impact: The luxury goods sector is affected, with investors skeptical about Kering's ambitious targets. Gucci's slowdown has implications for the broader luxury market, as it was previously a significant growth driver. The turnaround plan could lead to valuation repricing if Kering successfully executes its strategy, but failure to meet targets could result in further share price decline.

PARAGRAPH 3 --- What to watch next: Kering's Q3 2023 earnings report (scheduled for October 2023) will provide an update on the progress of the turnaround plan. Additionally, the luxury market's performance during the key holiday shopping season will be crucial in assessing Gucci's recovery. Lastly, any updates or changes to Kering's 2026 revenue ambitions will be closely watched by investors.