Transcription
Look at the video. Thank you so much for being with Bloomberg TV today, right here in Florence, where Gucci was born in 1921, more than a century ago. Do you think that today's Capital Markets Day and strategic plan is kind of a rebirth for Gucci?
And I shouldn't be. I think the idea of coming back to the source of the brand is probably the most important in our group. And also to show that this is the beating heart of of caring, right as well, because we have plants producing, you know, all the brands, etc.. So the heart of the system is here, I think is very symbolic.
Over the past few years, however, we've seen this lost Gucci losing a bit of desirability. How do you plan to really revive this this morning? And that is a little bit saying your plan is a little bit cautious. What's your reaction to this?
I think I think you need there's not a cautious prime plan, is it's a it's a common sense thing because I think at a certain point in time, though, we probably made a few, let's say, mistakes on the plan so we know what we have to do. We know with which is about, we know who the customer wants to expect from Gucci, and we're going to be very, very quick and decisive on providing the people what they want, maybe also things that they have, you know, they don't know that they want, but the Gucci will kind of imported from the more so let's see what they don't know where they want to own.
Obviously, you know, as you and X car CEO, you launched a very shiny new model such as a very successful Renault five. What is the new all five iconic product of Gucci? I don't know. Must probably be I mean I think that would make defines or in in business terms the success of a luxury brand normally is into the leather goods space. So probably, you know, I think as long time that Gucci is not, for example, launching an iconic bag or something the staging to the things or probably that will be where, you know, I would give the challenge to the team to come up with something that, you know, blows the market away and hopefully we can make it to that.
Yeah, I think is the whole idea of developing Gucci on many categories. We actually stated that we want to go back to jewelry of watches. Some of them were very iconic product. So I think, you know, there is a lot of potential. It's a great brand, is the second most known brand on the planet in the luxury space. One of the most famous Italian brands is still that you say that I believe even diamonds still in the top five in the market. So it's a good platform.
Of course, we cannot ignore that the short term situation is difficult. We've seen this week the Middle East fears causing luxury stocks to plunge all across the board. Do you think these short term uncertainty, geopolitical fears is making your plan much more difficult than you predicted?
I think we saw a little many years where, you know, even the industry is is, you know, impacted by a strong volatility also geopolitically everywhere. So this volatility is is factored into the plan because we're trying to build a company that is more agile, that is light, that explains exactly to mass of this volatility. We believe in the region in the long term potential of the Middle East. I think long term we will continue to grow. So we have no hesitation to continue to invest. It's a very important customer, etc.. So, you know, I think unfortunately this I hope that this thing will, you know, come down very quickly, hopefully. And but we believe in the long term that the Middle East will be a key region for luxury, even if the aspiration and consumer may not be here right now in the Middle East. I think you have a lot of people that are in the core category and in the vaccine category. This is the heart of the business there.
Obviously, Gucci is 60% of profit, but you have other brands you sell with giving it to Balenciaga, obviously Bottega Veneta, you're looking for a new CEO. You come from the car industry, you've got a lot of people in. Would you perhaps be looking at an external candidate for Bottega Veneta, someone perhaps from the car industry?
No, no, I don't think I no, I don't go. You know, I didn't go so extreme. I think we are looking at people in adjacent industry or people that are, you know, proved professional in the luxury world. I think Bottega is a very attractive brand. So we don't have really the issue of, you know, attracting people. But I also want to take, let's say, the time to make the right decision because leadership and fatigue in our system is a very relevant role. So but it's not going to last very long before we, you know, kind of communicate about this movement. In the meantime, I don't know if it's reassuring. For you, but I'm taking care of the Bottega Veneta team. And, you know, I love that brand. And so I'm trying to support them in the field. But it's a good team that is working together pretty swiftly.
Obviously, at Gucci, we also have Dan, who came as a creative director, did the first fashion show in Milan in February. Josh and then also have new creative directors, which is making the market very competitive. How long are you giving them at Gucci?
I think, you know, I think one of the issues why Gucci has been, you know, more recently in troubles was the lack of stability, you know, in the management team on the creative side, you know, many changes. And I think it's very important for me that we, you know, I can assure stability for the team, both on the management. I'm on the creative side. So it it's not about this, you know, it's not about, you know, giving time more like I said that I think we just have to all work together to make sure that they're not going to split us all for potentially is one of the greatest of this generation. And he has it now in his hands, one of the most beautiful brand, you know, in this sector. So I'm pretty optimistic that everything will will work and things well done required time. And we want to do good things with with which.
This morning you also announced this new deal with ICF, which is very present in China. This is the debate at this moment about Chinese consumer becoming more nationalistic, buying Chinese products, at least made in China. Is that the rationale behind this?
And the rationale is to open a door, you know, in the Chinese market, in the in the in the system itself, having, you know, partners and friends that can let us understand what's going on there, even, you know, behind the curtain in, you know, the old supply chain, the whole industrial thing, etc.. So I think I'm very well placed ex, you know, automotive executives to understand how important it is to understand what's going on in China, not only on the business side, but also on the innovation side on every single sector. So I think it's a fantastic opportunity to exchange, open up and support them in their development. But also we feeling more at home in China and and be perceived as some company that contributes to, you know, the development of the industry there. We also did craft, you know, in this kind of residence for creative people with very, very good resonance. We participating and cooperating with the Shanghai Fashion Week to do things. That's part of the story of kind of localizing, you know, our presence everywhere in the world where we are good citizens of each one of the market. I think China gave us a lot in terms of market. And so we also need to give back. And that's that's the rationale.
That very quickly, because we're running out of time, obviously you sold the Kering Beauté to L'Oreal for billion euros. Is it just for getting that or are you still sticking to the plan of increasing your stake in Valentino in 2829?
I think to do two things are independent. I mean, we have a reality is that we are you know, we have a deal for a put call option in 2029, which will be postponed by, let's say, a couple of years because it was actually practicable for both. We had to, you know, we didn't have probably the resources to handle, you know, the landing of a new brand. If we would come in 26, 27, they needed time to develop the things. So it was good for both. And I think with this postponement, I can concentrate on, you know, fixing all the things that have to fix and probably at that tourism that will be stronger even from a management bandwidth point of view to potentially accommodate. So this is the the deal on on L'Oreal. I think it was partly motivated by the fact that we had to deleverage. Carrie. But honestly, if I think about it, this kind of construction will help us to boost the development of our brands, because L'Oreal laser is a fantastic machine. And so I'm sure that, you know, what they've done in Saint Laurent can be repeated in other brands. And finally, we will get, you know, a certain amount of royalties, which will help. But also, I think we can benefit of the marketing power machine of of, let's say, of L'Oreal that will enable us to give, you know, to create awareness, reach for all our brands, even the ones that that are a little bit more issue like Balenciaga or Bottega Veneta in cosmetics. So so I think it's a very.
Finally, how is your relationship with IP now that the two roles are split? What advice is you giving?
You know, I think a lot of advice because he has been to. Two years at the helm doing my job. So he has seen a lot of situations. So it helps me also to decode based on the information it gives me, let's say, why would this thing happen? What is the origin of this? So that is very, very helpful. So we have a very smooth relation, very fluid. And, you know, I think I speak with him like at least a couple of times a week. And, you know, now we're flying together to to a place which I don't want to say, but, but, you know, yeah, it's a it's a very, very good to work in him. It's, you know, he's doing the chairman is right to do that and, you know, I'm the operational guy and I try to run the machine.
Thank you so much for getting me the. Thank you so much for welcoming us here in France. Thank you. Thank you.