Brand name changes are always complicated situations, involving important risks, unclear benefits and elevated costs.
A very tense moment indeed.
I had the opportunity to converse with Louise Beveridge, Corporate Communications Director of this group, to try to better understand this change, which is of considerable importance to this conglomerate that we don’t know all that well.
The stated objective : to rehumanize the group and give it meaning.
PPR/Kering’s ID card :
PPR originally stood for “Pinault Printemps La Redoute”.
Of these 3 words, today only Pinault remains, althought his son now runs the group.
Changing the name to Kering is a way of expressing this new reality, because the group now has only one area of activity : “creating and distributing clothing and accessories in 2 different sectors (luxury and sport)”.
Kering has a turnover of almost 10€Bn, an Ebitda of 2€Bn and close to 30000 direct employees.
Luxury goods (64% of turnover) : Gucci, Bottega Veneta, Yves Saint Laurent but also Alexander McQueen, Boucheron, Balenciaga, Sergio Rossi and Stella McCartney.
Sports and lifestyle (36% of turnover) : Puma, Vilcom and Electric.
France accounts for 6% of the group’s activities, Western Europe still represents 30% (although this number is falling), Asia 37% (including Japan) and America 26% (including South America).
It’s important to point out that for Kering, the sports branch and the luxury goods branch are not all that different and have the same value chain :
- Creation phase
- Production phase
- Distribution issues (digital, retail, licenses…)
- Marketing and celebrity management
- Subject to event calendars
Why this change ?
This is no gratuitous act ; this is an essential change for the group.
It is directly related to the changes the company has undergone since 2005, when François-Henri Pinault took over as CEO.
PPR (Pinault Printemps La Redoute) was historically closely linked to retail in France and to a lesser degree, to luxury goods.
Strategic analysis moved the group into clothing and accessories and pushed it out of its distribution-related activities (La Redoute, La Fnac, Le Printemps…) in France (small margins in a stagnating market).
Consequently, since 2005, the group has gone through 3 major upheavals :
- Relinquishing its distribution activity
- Acquisitions to consolidate luxury brands and more recently, sports brands
- Changing from a financial holding to an industrial enterprise (with a group having a true centralized role)
In becoming more specialized, the group hopes to move beyond its status of financial holding and evolve into a fully integrated group that accompanies its brands.
As such, Kering backs its brands in all areas : real estate, legal, fiscal, human resources, communications (in particular, advertising space buys) and even e-commerce.
The idea is that all brands should benefit from the group’s strength and optimize synergies while encouraging experience sharing.
For example, the sports brands are more at ease in the digital world, whereas the luxury brands are excellent “sourcing” managers.
All these ideas are brought together in this brand name change and expressed in a clear and simple manner.
What is Kering’s positioning ?
First of all, let’s point out that Kering is pronounced just like “caring”.
This is obviously no coincidence.
According to Louise Beveridge, this echoes not only François-Henri Pinault’s own personal values, but also a policy of Corporate Social Responsibility (10€M), the new dynamic between the group and its brands, and the need for employees to work in a company they believe in.
In today’s opaque financial world and in a society searching for values, this change resonates loudly.
Who does this brand name change target ?
This change is primarily B2B but can sometimes target B2B2C.
The targets are clearly identified :
- Present and future employees : I need to know who I belong to and what the group’s values are
- Business partners : I need to know who I am working with
- Press & Media (economic but also sectors of activity) : need for a better understanding of the group
- Investors and analysts : should I invest in this group ?
- NGO’s : a need to understand the group’s stance on a variety of topics
How does this materialize ?
Initially by creating an intranet group but also by developing content that covers a multitude of topics.
The group’s brands are a never-ending source of great stories but Kering does not want to become an aggregator.
Content will be produced, it will illustrate the group’s position on subjects ranging from digital integration in the workplace to the role of e-commerce to company values in the 21st century…
We should also begin to see the beginnings of sharing between brands. This may seem obvious, but anyone who has ever worked in a large corporate group knows this is easier said than done.
The new baseline expresses the group’s position : “Empowering Imagination”.
These two words express the desire for imagination to be found not only in the products but in the customer relationship, in the creation of values, in the manner of collaborating – in short, at every level of the group’s business.
The group wishes to express an open and generous outlook, because this is promotes forward motion.
This attitude can be seen in, for example, allowing people outside the group (creatives, bloggers, journalists) to speak out and share their ideas for forward movement.
The group wishes to open up and make use of its strengths to highlight new talent, for instance.
What are the stages of this brand name change ?
- Define a reason for being
For the time being, Kering is in the second phase and say they will take their time to do things right.
They believe that a spectacular launch would not be in good taste (money uselessly wasted on B2B targets) and would be in contradiction with the group’s desire for efficiency.
They are currently responding to the duty to inform their main markets : US, UK, France, Italy, Japan and China.
What is at stake in such a change ?
According to Louise Beveridge, there are 4 major steps :
- To succeed in creating a simple, complete and relevant positioning, both internally and externally (a necessary anchor) : empowering imagination
- To define a strong brand name, one with true meaning.
- To spread the information, minimising confusion and disorientation : in progress for Kering / this is a process taking place over the course of one year
- To implement and to nurture