Transcript
Introduction
Matt
This is Matt Reustle and today we are breaking down the global luxury group Kering. You know Kering from their brands: Gucci, YSL, Bottega Veneta, Balenciaga, and the list keeps going. It's a luxury house with similarities to what you know from LVMH. But LVMH over the past five years is up over 40% and Kering is down over 60%.
To breakdown Kering, I was joined by Jonathan Eng, portfolio manager at Causeway. Jon has spent over 30 years in the investment space and he has seen his fair share of cycles for a company like Kering, which made this a fun and timely breakdown. We covered the Pinault family, the owners and operators of Kering. We got into wholesale distribution versus retail distribution and the margin profile of brands and the various levers that you can pull.
But Kering's core brand, Gucci, is different than a lot of what you see in luxury, and we spent a significant amount of time diving in there. What makes Gucci more cyclical than understated luxury? Where do we stand with Gucci today and how does Jon think about all of this as an investor tapping into his historical context in the space? It was a very fun conversation. It's a very timely conversation. So please enjoy this breakdown of Kering.