Luxury brand gives itself a bad name

What exactly is Kering? If you don’t know, by the end of June you’ll be familiar with the word and the organisation behind it.

Mark Ritson

PPR is rebranding itself as Kering. That still might not mean a lot to you but if I tell you that it is a company that owns brands such as Gucci, Bottega Veneta and Yves Saint Laurent, you can grasp the significance of the move.

The strategy was commissioned by chief executive François-Henri Pinault, with the new name and identity invented by Havas Lifestyle and the brand strategy from consulting firm Dragon Rouge. According to the press release, the name Kering (pronounced ‘caring’) describes the group’s “attitude towards our brands, people, customers, stakeholders and the environment”. The name is partly derived from the Breton word Ker meaning ‘home’ or ‘place to live in’ - a reflection of Pinault’s family roots in the Brittany region. It also comes with a new logo of an owl in flight and a corporate slogan ‘Empowering Imagination’.

Once approved by shareholders, the name will be promoted with a major ad campaign in which “the Group’s distinctive way of nourishing the imagination of its brands” will be communicated across North America, Europe and Asia. The campaign will be supplemented with significant digital communication on Facebook and Twitter.

It is, of course, a dreadful mistake. But before going into why, I have to openly declare an interest. For over a decade I have worked for many of Kering’s competitors in the luxury brand space. But during that time I must also declare a begrudging admiration for much of what PPR has achieved with its brands portfolio. Even from the other side of the fence, one would have to admit that PPR had the magic touch when it came to brand management. Until now, that is.

So what is so bad about the new corporate brand? Ignore the Kering name itself - yes it’s clumsy and has lots of silly meanings in different languages as usual - the real mistake is the shift in brand architecture from a house of brands to one of brand endorsement.

It’s likely that even if you are a loyal consumer of brands such as Gucci, Stella McCartney, Brioni or Sergio Rossi, you have no clue that they are owned by the same company or that it is called PPR. That’s an appropriate situation for a company that owns a wide range of brands in industries where heritage and provenance are crucial in maintaining desirability. To put it more simply, the best corporate brand strategy is not to have any corporate brand equity in the first place, at least not with consumers.

The house of brands approach dictates that while the holding company must exist for legal reasons and internal operations, it should keep an extraordinarily low profile with the consumers who patronise the brands. Hence, the fact that both LVMH and Richemont, the other two titans of luxury branding, keep their respective profiles as low as possible with consumers.

When you buy a luxury handbag or pay the price of a small car for a handmade watch, you want to buy something artisan, distinctive and born from a very particular and powerful heritage. The presence of modern corporate brands with invented names and strategically derived slogans has no place here. The synergies of a luxury branding group are significant but they are all found in ‘back of house’ advantages like merger and acquisitions, media buying and HR. At the front of house the magic trick is to ensure each brand appears as distinct and independent as possible.

That’s especially important for Kering because several of its brands are non-luxe. Puma is a fine, mid-tier, sporting brand, for example, but the minute you lay a thin line of gunpowder connecting it to luxurious names like Yves Saint Laurent or Gucci, the subsequent explosion can only be damaging. And what good are Kering’s much vaunted Breton roots for a brand as British as Stella McCartney or as Italian as Sergio Rossi?

Much of the blame for the move must go to Pinault. I can only guess he was unhappy being the supremo of a company that no one had heard of while his lieutenants soaked up all the praise as the presidents of the brands in the group. Well he is about to become the boss of a famous brand, but it’s one whose fame will only hamper his company’s long-term business prospects.

Dragon Rouge must also take responsibility for not pointing out the disadvantages of replacing a successful house of brands architecture with an inappropriate endorsement approach, irrespective of how nice the new logo looks or how many headlines its introduction will garner. The fact that the firm usually consults for FMCG brands suggests that it may have made the mistake of following a trend, common among grocery brands, to introduce a stronger corporate brand and imported it crudely into luxury.

Whatever the reason, it’s a stunning error of judgement. As with all cases of bad architecture, the end result will prove significantly less than the sum of its parts and result in a shared sense of disappointment for all those forced to inhabit this ill-considered new structure.

Readers' comments (19)

  • Whilst sometimes Mark's observations are questionable, I have to say that I completely agree with him on this. What on earth can be the rationale, other than corporate ego!

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  • I'm in China at the moment and the resonance is of individual brand currency. To many there is no realisation that one brand that competes with another may be of the same Company. I suspect though that the rebrand will be kept as an internal shift rather than a consumer statement

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  • Mark frame this article next to a print out of the LVMH Facebook page. Both examples of head office having little better to do than try upstage the brands that actually make money.

    Not to sure if we will look back and laugh or cry. Either way it does not look pretty.

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  • On the face of it, it looks like a blunder.

    However are we missing something here?

    Surely the cat is out of the bag by now and most customers understand and/or don’t care about the conglomerate structure of their favourite brand?

    Also don’t forget the fact that these conglomerates need to attract equity investors too. Opening up to Retail investors can’t hurt.

    May be this is how the industry is evolving.

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  • The brands I work on were recently in a similar boat, and although we won the battle of stupidity with the holding co who wanted to push forward waving their own flag, it was very close.

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  • All I can think of when I see this is 'Kerrang!'

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  • Bad move. More like Ker-plunk!

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  • Kering or Kerching?! I'm not sure they will upstage the brands within the group in reality...

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  • Full page ad in the FT today for Kering. All the brands listed under the corporate logo! Ho ho ho. Total madness.

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  • I think so. I am from Bangladesh. OTOBI is a brand furniture company. But this name is not easy to memorize to the people.

    I think luxury brand should give a easy memorize name.

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