Kering
Luxury conglomerate where pecking order ambiguity drove operating margin from 24.3% to 14.9% as brands fragmented under market pressure.
In 2024, Kering posted €17.2 billion in revenue—down 12% year-over-year—while operating margin collapsed from 24.3% to 14.9%. The group appointed three new brand CEOs (Gucci, Saint Laurent, Balenciaga), one new creative director (Louise Trotter at Bottega Veneta), then in December 2025 replaced Gucci's creative director Sabato De Sarno after just two years. By February 2025, analysts labeled it an "annus horribilis." The financial damage reveals what happens when pecking order ambiguity persists during environmental stress.
Gucci generates 45% of Kering's revenue but declined 23% in 2024 to €7.7 billion. Without a clear alpha brand—the equivalent of LVMH's Louis Vuitton—Kering's portfolio fragments under pressure. When luxury demand contracts, ambiguous hierarchies force brands into continuous dominance contests rather than coordinated response. Bottega Veneta grew 4% while Gucci hemorrhaged revenue; Saint Laurent fell 9% while eyewear jumped 24%. This mirrors slime mold behavior when chemical gradients become unclear: individual cells pursue independent strategies, dissipating collective energy that could flow toward survival.
The executive turnover data quantifies hierarchy costs. Kering averaged 19% annual executive turnover versus LVMH's 8% over the same period, while brand portfolio growth lagged at 8% versus LVMH's 12%. In biological systems, unstable dominance hierarchies increase stress hormone production by 40-60% across all rank positions—energy diverted from growth or reproduction into status maintenance. Kering's operating margin collapse (down 9.4 percentage points in one year) while LVMH maintained 26% margins despite identical market conditions demonstrates the metabolic cost of hierarchy ambiguity.
The February 2025 appointment of Luca de Meo as CEO represents an attempt to crystallize hierarchy after years of ambiguity. But pecking orders require either clear dominance signals or coalition formation. Kering faces the phase transition challenge: installing hierarchy during scarcity triggers more violent contests than establishing it during abundance, because subordinate brands lose immediate resources rather than just growth opportunities. The group's Q1 2025 guidance—"very modest" top-line growth and "quite low" H1 profitability—suggests hierarchy clarification will cost significant energy before generating efficiency gains.