Model during Balenciaga fashion show at Paris Men’s Fashion Week (Photo: Getty Images)
“What is Kering?” was one of the questions that arose during the fashion show of the French fashion brand Balenciaga at Paris Fashion Week in January. The unknown name appeared in a sweatshirt worn by one of the models, referring to the group that holds not only 100% of the actions of the brand but also many others.
Previously, the luxury market was produced by small family businesses that assembled their articles on a small scale and artisan way. Nowadays, this model has given way to luxury conglomerates, that is, globalized groups that control several renowned brands. To survive in this competitive field, the only way out is to become part of a larger and more dominant group that can manage the brand.
The main result of the transformation in the luxury market scenario is the creation of products that retain characteristics such as quality, excellence, and tradition. But these products must be manufactured in bigger quantity, be accessible to a larger portion of consumers. Still, rare enough to preserve the aura of exclusivity and the high price.
The market is no longer run by small families and has become a conglomerate with a global dimension.
In this segment, there are three main conglomerates: LVMH, Kering, and Richemont.
There are even smaller groups, such as Prada, Ferragamo and a few brands that remain independent, such as Dolce & Gabbana and Giorgio Armani. The main disadvantage for independent brands is the question of credibility, as it is not possible to omit how the products are made, nor what the financial performance of the brand, facts that can shake their reputation with the market and the consumer. This situation may be better circumvented by conglomerates, as they can reveal a global balance, which includes all brands in an attempt to disguise possible failures.