The Gucci Hub in Milan finds itself at the heart of a major controversy that is rocking Kering, the French luxury giant. Recent revelations have highlighted potential conflicts of interest involving senior members of the group in dubious renovation contracts. The affair comes at a time when Kering is struggling to turn around the performance of Gucci, its flagship brand.
On May 20, shocking revelations by French online investigative newspaper Médiapart and Italian daily Domani shook the foundations of French luxury giant Kering. These involve the famous Gucci Hub, the House’s headquarters in Milan.
The affair allegedly began on February 10, 2023, when the Italian tax authorities (Agenzia delle Entrate) received a complaint from a former Kering employee, revealing previously unknown details about the construction of the Via Mecenate building, which will house the fashion house’s offices, exhibition spaces and catwalk shows.
According to the complaint, Kering chose as consultant a company belonging to Angele Marie Palus, wife of Jean-François Palus, who was then Kering’s Chief Financial Officer, for the construction of the Gucci Hub. This decision would have aroused suspicions that the work might have been overbilled, enabling Kering to avoid taxes.
“In the hypothesis described in the complaint, the invoices would in fact have been entered on the fashion group’s balance sheet as costs, in order to reduce the tax base and pay less tax. Evasion or not, one fact remains however: Kering chose as its supplier the company of the wife of one of its most important executives, and never communicated this to the market”, summarizes the Italian media Domani.
Conflict of interest
The affair reveals a major potential conflict of interest.
To better understand it, we need to go back to 2012, when Kering Italia’s Board of Directors approved the renovation of Kering’s headquarters in Milan, near Linate airport. The French luxury group hired Italian studio Piuarch to oversee the architectural design and construction management.
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Read also>KERING HAS ACQUIRED A MAJOR MILANESE PROPERTY ON VIA MONTE NAPOLEONE
Featured photo : © Gucci
