Bluebell takes a stake in Kering

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The activist fund, which has taken a stake of less than 5% in Kering, is pushing for change at the French group, which has been weighed down by the slowdown at Gucci. While it is said to have already influenced recently announced management decisions, it is now advocating the merger of the group with Richemont.

We knew François-Henri Pinault was on the alert when Gucci, Kering’s flagship brand, fell out of favour. The entry of the activist fund Bluebell into the capital of the luxury group, which was revealed by Bloomberg on 19 July and confirmed to Reuters, should make it even harder for his CEO to sleep soundly.

 

For several months now, the fund, which has played havoc with major groups such as Richemont, has held a stake in Kering’s capital, albeit a very small one (less than 5%), so as not to have to declare any shareholdings to the Autorité des marchés financiers.

 

Kering-Richemont merger?

 

But the fund’s influence is often inversely proportional to the number of shares it holds…

 

According to several sources, including Le Monde, the activist fund has already met with Kering’s management to encourage it to improve its operating performance, particularly that of Gucci (which accounts for half of the group’s sales and nearly two-thirds of its operating margin). He also called for organisational changes and acquisitions. The icing on the cake is that he also advocated a merger between the French group and Switzerland’s Richemont.

 

This is a possibility that some observers do not believe in, given that the Pinault family, Kering’s largest shareholder via its holding company Artemis with 42% of the capital and 59.3% of the voting rights, has on several occasions indicated its wish to retain control of the luxury group. Last May, Johann Rupert, the CEO of Richemont, himself revealed that he had opposed the merger of his group with Kering two years ago.

 

Nonetheless, the idea of such a merger does not now seem totally impossible to some, at a time when Kering’s market capitalisation has been eroding.

 

Management reorganisation

 

In the meantime, Tuesday’s announcement of the Group’s managerial reorganisation, and in particular the departure of Marco Bizzarri to Gucci, is likely to be a response to the pressure exerted by Bluebell.

 

Generally speaking, while Bluebell’s intervention is sometimes followed by a visible effect (such as the removal of Danone CEO Emmanuel Faber in March 2021), its demands are not always followed by action.

 

The activist fund, which acquired a stake in Richemont in 2021, tried in the summer of 2022 to push the group to change its governance by appointing Francesco Trapani, a former LVMH executive, as an independent director on the board of the Swiss group. But the proposal was rejected at the Annual General Meeting in early September 2022.

 

For its part, the stock market is certainly appreciating the new situation at Kering. After jumping 7% on 19 July, the French luxury giant’s share price rose by almost 2% the following day…

 

Read also > Kering overhauls its governance

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The activist fund, which has taken a stake of less than 5% in Kering, is pushing for change at the French group, which has been weighed down by the slowdown at Gucci. While it is said to have already influenced recently announced management decisions, it is now advocating the merger of the group with Richemont.

We knew François-Henri Pinault was on the alert when Gucci, Kering’s flagship brand, fell out of favour. The entry of the activist fund Bluebell into the capital of the luxury group, which was revealed by Bloomberg on 19 July and confirmed to Reuters, should make it even harder for his CEO to sleep soundly.

 

For several months now, the fund, which has played havoc with major groups such as Richemont, has held a stake in Kering’s capital, albeit a very small one (less than 5%), so as not to have to declare any shareholdings to the Autorité des marchés financiers.

 

Kering-Richemont merger?

 

But the fund’s influence is often inversely proportional to the number of shares it holds…

 

According to several sources, including Le Monde, the activist fund has already met with Kering’s management to encourage it to improve its operating performance, particularly that of Gucci (which accounts for half of the group’s sales and nearly two-thirds of its operating margin). He also called for organisational changes and acquisitions. The icing on the cake is that he also advocated a merger between the French group and Switzerland’s Richemont.

 

This is a possibility that some observers do not believe in, given that the Pinault family, Kering’s largest shareholder via its holding company Artemis with 42% of the capital and 59.3% of the voting rights, has on several occasions indicated its wish to retain control of the luxury group. Last May, Johann Rupert, the CEO of Richemont, himself revealed that he had opposed the merger of his group with Kering two years ago.

 

Nonetheless, the idea of such a merger does not now seem totally impossible to some, at a time when Kering’s market capitalisation has been eroding.

 

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The activist fund, which has taken a stake of less than 5% in Kering, is pushing for change at the French group, which has been weighed down by the slowdown at Gucci. While it is said to have already influenced recently announced management decisions, it is now advocating the merger of the group with Richemont.

We knew François-Henri Pinault was on the alert when Gucci, Kering’s flagship brand, fell out of favour. The entry of the activist fund Bluebell into the capital of the luxury group, which was revealed by Bloomberg on 19 July and confirmed to Reuters, should make it even harder for his CEO to sleep soundly.

 

For several months now, the fund, which has played havoc with major groups such as Richemont, has held a stake in Kering’s capital, albeit a very small one (less than 5%), so as not to have to declare any shareholdings to the Autorité des marchés financiers.

 

Kering-Richemont merger?

 

But the fund’s influence is often inversely proportional to the number of shares it holds…

 

According to several sources, including Le Monde, the activist fund has already met with Kering’s management to encourage it to improve its operating performance, particularly that of Gucci (which accounts for half of the group’s sales and nearly two-thirds of its operating margin). He also called for organisational changes and acquisitions. The icing on the cake is that he also advocated a merger between the French group and Switzerland’s Richemont.

 

This is a possibility that some observers do not believe in, given that the Pinault family, Kering’s largest shareholder via its holding company Artemis with 42% of the capital and 59.3% of the voting rights, has on several occasions indicated its wish to retain control of the luxury group. Last May, Johann Rupert, the CEO of Richemont, himself revealed that he had opposed the merger of his group with Kering two years ago.

 

Nonetheless, the idea of such a merger does not now seem totally impossible to some, at a time when Kering’s market capitalisation has been eroding.

 

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Victor Gosselin
Victor Gosselin is a journalist specializing in luxury, HR, tech, retail, and editorial consulting. A graduate of EIML Paris, he has been working in the luxury industry for 9 years. Fond of fashion, Asia, history, and long format, this ex-Welcome To The Jungle and Time To Disrupt likes to analyze the news from a sociological and cultural angle.

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