French luxury goods company Kering, which owns brands such as Balenciaga, Alexander McQueen and Yves Saint Laurent, surprised the fashion industry this week when it announced a sweeping restructuring of its top ranks, including the departure of Marco Bizzarri, longtime chief executive of Kering’s flagship brand Gucci.
The move came amid a year of declining sales and stock performance. But the group run by billionaire François-Henri Pinault is also under pressure from Bluebell Capital Partners, an activist hedge fund in London that has previously tangled with the luxury titans, a person with knowledge of the matter said on condition of anonymity.
Kering declined to comment.
In recent years, activists have turned to the luxury industry. Dan Loeb’s Third Point as well as Artisan Partners called for change at Richemont, owner of jewelry brands such as Cartier and Van Cleef & Arpels. But the most active recently is four-year-old Bluebell, also a $250 million company. hit the richmont, and fashion brand Hugo Boss. (Bluebell has also pushed for change at BlackRock and pharmaceutical giant GlaxoSmithKline.)
Bluebell failed to persuade fellow Richemont shareholders to add Francesco Trapani, former chief executive of Bulgari, as a director, but the group agreed to give public investors more influence.
Bluebell is an ambitious goal for Kering. Although the hedge fund is seeking a number of changes at the group and Gucci, it has also proposed a merger with Richemont, a person with knowledge of the discussions said.
But getting the deal done will not be easy. Johann Rupert, the founder of Richemont, said in May that he not interested in merging – and rejected such a proposal two years ago. And Mr. Pinault might not be interested either. Furthermore, both luxury companies are controlled by their founding families, making it nearly impossible for outside investors to win corporate elections.
Bluebell is hoping that troubled shareholders will join its effort. Over the past year, Kering’s share price has been eclipsed by rivals such as Hermes and LVMH, while sales increased by only 1 percent, up to 5.08 billion euros (then $5.58 billion) in the first quarter. But Kering’s stock soared more than 7 percent on Wednesday after Bloomberg first reported On Bluebell’s efforts.