François-Henri Pinault


François−Henri Pinault left his mark on 2015 in ways unmissable — and also under the radar. He kicked off the year with a dramatic regime change at Gucci that reverberated through fashion — making an instant star of inside-guy Alessandro Michele, whose quirky, androgynous and romantic approach struck a chord with the industry and gave new zest to the Italian brand.

Out went longtime designer Frida Giannini and chief executive officer Patrizio di Marco, and in came Marco Bizzarri, a rising star in the French group who had previously led Bottega Veneta and who in 2014 had been promoted to ceo of Kering’s luxury couture and leather-goods division, which includes brands such as Stella McCartney, Alexander McQueen and Christopher Kane.

This story first appeared in the December 16, 2015 issue of WWD.  Subscribe Today.

Pinault did an encore in October with another surprising recruitment: tapping underground fashion talent Demna Gvasalia from the nascent Vetements brand to take the creative helm of Balenciaga. The Georgian designer is to show his first Balenciaga collection for fall 2016.

“This is an industry that has to and knows how to take risks; it’s the very essence of creativity in this job,” said Pinault, WWD’s Newsmaker of the Year.

In a topsy-turvy year marked by volatile currencies and wobbles in emerging markets, Kering held its own and outpaced some of its luxury peers, logging revenue growth of 12 percent in the third quarter as its luxury sales benefited from a massive influx of tourist shoppers in Western Europe and Japan, compensating for a slowdown in Mainland China. (Stripping out currency effects, sales were up 3.1 percent in the quarter.)

Saint Laurent continued as one of the fastest growing marquee names, posting growth of 26.6 percent on a comparable basis thanks to ongoing customer demand for Hedi Slimane’s $5,000 biker jackets and $2,000 monogram satchels.

Pinault also forged ahead with his corporate and social responsibility convictions, making important advances in protecting the environment.

He unfurled Kering’s first Environmental Profit and Loss account, a tool to measure the value and impacts on the planet of its business activities. It showed that more energy-efficient stores and product assembly at suppliers helped the conglomerate shave 11 million euros, or $14.6 million, off its environmental impact in 2014.

Pinault, who put environmental and social issues at the top of his corporate agenda since he arrived at the helm of the family-controlled firm a decade ago, also ended the most recent Paris Fashion Week on a green note by hosting a screening of “La Glace et le Ciel,” (“Ice and Sky”), a poignant portrait of French glaciologist Claude Lorius, a pioneer in documenting global warming.

“We are keen on open-sourcing and sharing our sustainable breakthroughs with others, including our competitors,” Pinault said during a speech at Tsinghua University in Beijing this month.

“The way we do things matters as much as the financial targets we are trying to reach.”

The chairman, president and ceo of Kering also continued to draw attention to key issues affecting women, including a White Ribbon campaign and a digital initiative to draw attention to the fact that one in three women in the world are beaten, raped or otherwise abused in their lifetime.

Pinault also set a partnership with the Cannes Film Festival called Women in Motion. The series of talks, events and awards around women’s issues foreshadowed the likes of Meryl Streep, Jennifer Lawrence and Gwyneth Paltrow speaking out publicly about being paid far less than their male costars.

Recognizing his efforts to fight against discrimination and violence against women, Pinault was awarded the Anti-Defamation League’s International Leadership Award in New York, only five days after terrorists attacked cafés and a concert hall in Paris, killing 130 people and injuring hundreds.

“Our nation will come together with all those who know that democracy, and a peaceful and tolerant society, are the most precious values we share,” he said in an eloquent and moving acceptance speech, accepting the prize in the name of Kering’s 32,000 employees worldwide. “We need to defend what we have fought together for so long; and we will do so through vigilance, education and awareness.”

(Marring a stellar year of good works, Kering Americas Inc. and Alexander McQueen Trading America Inc. were hit last week with a lawsuit by two employees alleging racial discrimination. “We — Alexander McQueen and Kering — take these allegations very seriously and we are investigating, however, we don’t comment on current litigations,” according to a Kering spokesperson.)

Pinault was also awarded the Green Carpet Challenge Leaders of Change Award from Livia Firth’s Eco-Age consultancy for having launched “the transformational and pioneering EP&L and open sourced it to encourage integration of the value of nature into business.”

In an interview with WWD, the affable executive reflected on some key moments of the year:

Your overhaul of Gucci was bold and unexpected. Did it feel like a risk at the time, and why did you take the plunge?

Gucci chief executive officer Marco Bizzarri and I agreed about a year ago that the house needed a deep transformation — not only on some aspects and some products, but a deep transformation, in its artistic direction and also in its organization and culture. When you want to transform this way, you have to take risks. This is an industry that has to and knows how to take risks; it’s the very essence of creativity in this job, so yes we took appropriate risks.

What were your criteria for the new creative director?

First, we required a good understanding of the house in question, both in its artistic codes and its history, and this is how we defined the most suitable creative profile. Because we planned to deeply transform the house, it was important to have somebody with an intimate knowledge of the brand. That is really important, otherwise the risks are much bigger. If there is this intimate knowledge of the house, its history, its codes and even its culture, that is an extra guarantee.

Secondly, it was essential to have somebody who has a passion for the house, and who wanted to share his or her creativity with the house, not just do a simple interpretation exercise. We wanted a creative person passionate about the house, who wants to marry the house, and bring his or her sensitivity. When this happens, you have something very sincere, very authentic. And when Marco and I met with Alessandro Michele, we saw he had all these elements at the same time, which is very rare. It’s true that he’s been at Gucci for a decade. How come he’s still here? How come we didn’t discover him earlier? But the vision he has for the house, the passion, the knowledge he has combined with the necessary deep transformation, it was no contest with the other candidates. There is risk-taking but it’s a measured one.

How do you explain the immediate and substantial influence Alessandro Michele has had on fashion with his freewheeling, bohemian androgyny?

Alessandro Michele is somebody who is extremely sensitive to trends; somebody with an extensive social life; somebody who travels, listens and who knows his métier. He has done something really pertinent by putting the sensitivity he always had in line with the house’s history. From his first show, put together in only a few weeks, he was able to express simultaneously a vision, in tune with the know-how of the house and all this in harmony with the house’s history. The style and direction that Alessandro Michele offered was totally new to Gucci, but nevertheless it found its audience right away. At once it was obvious that it’s Gucci, that it corresponds with Gucci, although it was very new. That combination is directly related to the intimate knowledge factor, the passion he has about the house. He’s somebody who has a very modern outlook on the world, who has passions, who is very open, very attentive but again it’s this combination. When a marriage is a beautiful one, it’s successful on the first day. That is exactly what happened.

 

Alessandro Michele’s first show as Gucci’s creative director

Alessandro Michele’s first show as Gucci’s creative director during Milan Men’s Fashion Week in January ’16.  Davide Maestri

 

You’ve charged ahead with your environmental commitments, with the EP&L account, the sponsorship of “La Glace et le Ciel.” Do you still feel like a lone wolf, or is the industry waking up?

Wolves live in packs. Thankfully, we decided a few years ago to make sustainability a key element of the group’s strategy…sustainability is a huge opportunity both for the planet, for humanity and businesses, provided that you approach it in a new way. That means putting this concern first in all the initiatives a company can undertake whether they’re creative, organizational, and so on. So when you breathe sustainable in the morning and that you work sustainable all day, it starts to click naturally.

There are other companies that share these values, including Virgin, Unilever and Natura. The circle is getting wider. Everybody understands the necessity. It’s false to think that other companies are not concerned. The issue is how to address the subject in a constructive manner.

What does it take to make a difference?

It’s really about changing the understanding we have of sustainability. It’s not a constraint along the way, it’s a working hypothesis at the start of every initiative and when you add your imagination and your creative capacity, you find unexpected solutions. For example, we developed a leather tanning process that uses neither chromium nor other polluting heavy metals, and used less water. We were told it was impossible to do. And it was impossible because no one had ever tried. We tried with Swiss-German and German university labs, and we found the processes simply because we searched.

The second element is that, of course, the solutions you find are at the beginning economically much more expensive than the existing practices. But if you stop there, you haven’t understood anything. The real challenge is not so much to find solutions, but to find solutions and to put them at an acceptable economic level for companies. And the method is the same — by searching and asking how you can get there.

Another example is sustainable gold, or fair-mined gold. When we decided to buy fair-mined gold, there was a 10 to 13 percent premium on conventional gold. We could have stopped there or we could have decreased our margin on materials by 13 percent. We searched and today, we have scaled back the price differential to 1 percent so the question no longer arises, and we buy fair-mined gold. It’s that state of mind, and entrepreneurs understand it well, but it requires another way of thinking, a different organization that’s very proactive, very constructive. Above all, these are opportunities for our business.

You’ve also taken up more difficult causes like violence against women. Why, and what kind of impact are these efforts having on employee morale, drive and solidarity?

I have been raised by my father to believe that companies have an obvious social responsibility that they have to accept. For me it’s part of the sustainable section of the company so that we have an impact and move things forward, I’ve always believed you have to find a cause related to the company, and that resonates with the company. One of the most important points in Kering’s transformation is that it has feminized a lot. Today, 60 percent of total staff are women, and in the sectors where we operate, 80 percent of our customers are women.

Aside from this, when I found out about the scale of the issue of violence against women, I realized it was time to replace silence with action on this subject. I said, here’s a cause that needs help. The fact that it’s a tough cause, hard to communicate and seemingly far from the luxury world, for me, it doesn’t matter. All of our brands must have the sustainability dimension in their corporate vision and that includes an environmental dimension and a social dimension.

Are you seeing much progress?

I’m always surprised to hear in job interviews that candidates question what we do for women, why we do it, and is it just [public relations] or is it real. It’s very interesting to see an extremely important evolution of mentalities about environmental and social issues, especially among younger generations.

What kind of impact did the Women in Motion initiative have?

Cannes is a partnership between the group and the festival to give our brands visibility in the cinema industry, which is very close to luxury.

We got to this idea that women’s situation in the film industry is very unbalanced and it was the opportunity to shed light on that situation in this realm and that’s how we took the partnership on, by adding this dimension. I’m very proud of what has been done in Cannes because not only did we reach our visibility targets but also we did this by serving a cause in the cinema industry.

Kering did better than some luxury peers in a topsy-turvy year. How do you explain that?

The year was very complicated, and we did a little better thanks to our portfolio of brands, especially ones that have transformed very brilliantly and successfully like Saint Laurent, along with the spectacular revitalization of Gucci.

Little by little, we are moving from a group of luxury brands toward a luxury group. Having a portfolio of brands that are very complementary in terms of categories, size and style so they don’t compete with one another — this has given us a better stability against monobrand rivals in difficult environments like this year. Beyond this, in order to become a luxury group, we give brands an increasingly strong operational support.

In effect, we have reorganized internally to bring more and more value to the brands as a group. We remain in a perspective of empowerment of the brands, but in the production field, logistics field, IT field, e-commerce or digital communication field, we have equipped ourselves with expertise at the group level in order to help the brands more and more. The group is making progress a lot in that dimension of group synergy that allows the brands to be stronger inside the group than if they were outside of it.

Saint Laurent is one of the fastest-growing brands in the industry, even though there were many doubters initially. Do you feel vindicated?

Saint Laurent is the first big story of turnaround of a house of a significant size. Like Gucci, we had made the decision to deeply transform the house because we felt it needed it. We were lucky to have Hedi Slimane with us to lead this transformation, this reform project that not only affects collections, but also image, stores, organization, supply chains. These were deep transformations. Yes, we did take a very important risk but here, too, it was measured.

Is there any accomplishment this year of which you’re particularly proud?

I must say the most important achievement is that we’ve transformed the culture of the group, particularly in the area of sustainable development, in a radical way. At the beginning, the will came from the top, the management teams, and very often in companies, if you let up the pressure, everything stops.

But today, because what we’re doing is out of complete sincerity, I no longer need to push the teams. It’s become a natural reflex and that’s extraordinary because it will guarantee us a future in the way that we conduct business, which will be a vital asset for the group. I am very proud of what the teams have done, especially their change of mind-set in that area.

 

 

Pinault’s World: 2015 Highlights
Jan. 21: Gucci confirms Alessandro Michele as creative director, succeeding Frida Giannini.

May 14-23: Having signed a five-year deal with the Cannes International Film Festival, Kering launches its first edition of “Women in Motion,” an event highlighting women’s contributions, on the French Riviera. “La Glace et le ciel,” (“Ice and Sky,” in English), which Kering coproduced, is the closing film of the festival.

June 29: Puma sells athletic footwear brand Tretorn to Authentic Brands Group.

July 1: A collection designed by Kering Eyewear, dubbed “Collezione Uno,” is unveiled to the trade. (Roberto Vedovotto, who serves as chief executive officer of Kering Eyewear, was appointed to its executive committee in March.)

July 9: Kering taps Hélène Poulit-Duquesne to become ceo of Boucheron, effective Sept. 28.

July 27: Kering appoints former Unilever executive Grita Loebsack as ceo of its luxury couture and leather goods’ emerging brands, effective Sept. 14.

Oct. 7: Balenciaga taps Demna Gvasalia, the founder and ringleader of hot Paris fashion label Vetements, to succeed Alexander Wang, who had staged his swan song on Oct. 2 after a three-year tenure.

Nov. 3: Surfer and Outerknown founder Kelly Slater is a speaker at the 2015 Kering Talk in London. Kering backs Slater’s sustainable apparel collection.

Nov. 7: The Kering Foundation launches its White Ribbon for Women campaign in collaboration with Stella McCartney, who designed a limited-edition brooch to promote the cause. Some 125,000 brooches would be distributed across 41 countries and in more than 800 Kering-owned boutiques.

Nov. 18: François-Henri Pinault accepts the Anti-Defamation League’s International Leadership Award on behalf of Kering’s employees, the Kering Foundation and its partners.

Nov. 18: Kering releases its Environmental Profit and Loss account for 2014, a tool to measure the value and impacts on the environment of its business activities. It shows that more energy-efficient stores and cleaner leather tanning are among tactics that helped Kering shave $14.6 million off its environmental impact.

Dec. 7: Pinault is awarded the Green Carpet Challenge Leaders of Change Award from Livia Firth’s Eco-Age consultancy.

Dec. 9: Kering says it will sell 100 percent of its Sergio Rossi business to European investment house Investindustrial.

Dec. 10: Kering names Sabina Belli ceo of the Pomellato group, comprising the Pomellato and Dodo jewelry brands.
THE KERING BRANDS: 2014 VOLUME

Gucci: $4.65 billion (at average exchange)
Bottega Veneta: $1.5 billion
Saint Laurent: $940 million
Alexander McQueen, Balenciaga, Boucheron, Brioni, Christopher Kane, Girard-Perregaux, JeanRichard, Pomellato, Dodo, Qeelin, Stella McCartney, Tomas Maier, Ulysse Nardin: $1.89 billion
Puma (including Cobra): $3.97 billion
Other sport and lifestyle brands (Volcom, Electric): $389 million

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