Kering, the French luxury goods company that owns brands like Balenciaga, Alexander McQueen and Yves Saint Laurent, surprised the fashion industry this week when it announced a sweeping reorganization of its top ranks, including the departure of Marco Bizzarri, longtime CEO of Gucci, Kering’s flagship brand.
The move came amid a year of declining sales and stock performance. But the group run by billionaire François-Henri Pinault is also under pressure from Bluebell Capital Partners, a London-based activist hedge fund that has tangled with the luxury giants before, said a person familiar with the matter who spoke on condition of anonymity.
Kering declined to comment.
Activists have turned on the luxury industry in recent years. Dan Loeb’s Third Point, as well as Artisan Partners, called for a change in Richemont, the owner of such jewelry brands as Cartier and Van Cleef & Arpels. But the most active company recently is Bluebell, a four-year-old $250 million company that also has Taken aim at Richemont, and the Hugo Boss fashion brand. (Bluebell has also pushed change at BlackRock and pharmaceutical giant GlaxoSmithKline.)
Bluebell failed to convince fellow Richemont shareholders to add Francesco Trapani, the former Bulgari chief executive, as a director, but the conglomerate agreed to give public investors more leverage.
Bluebell has an ambitious goal for Kring. Although the hedge fund is seeking a number of changes in the conglomerate and in Gucci, it has also proposed a merger with Richemont, said the person familiar with the discussions.
But achieving the deal will not be easy. Richemont founder Johann Robert said in May that he He was not interested in merging – He had rejected such a proposal two years ago. And Monsieur Pinault may not be interested either. Moreover, both luxury companies are controlled by their founding families, making it nearly impossible for outside investors to win corporate elections.
Bluebell hopes restive shareholders will join in pushing it. Kering’s share price has been eclipsed by competitors like Hermes and LVMH in the past year, while sales are up It rose only 1 percentto €5.08 billion (then $5.58 billion) in the first quarter. But Kering stock rose more than 7 percent on Wednesday after that Bloomberg first reported on the efforts of Bluebell.