Google Executive Joins Kering Board Amid Metaverse Drive – WWD
PARIS — In a sign of the growing relationship between luxury and tech, Kering on Thursday officially welcomed a senior Google executive to its board.
Speaking at the French group’s annual general meeting, chairman and chief executive officer François-Henri Pinault said he and members of his team planned to travel to California next week to meet Silicon Valley executives to explore further the potential of the metaverse — and unlike rival luxury magnate Bernard Arnault, he’s very much interested in selling virtual products online.
Shareholders gathered at Kering’s headquarters in Paris voted overwhelmingly to approve the nomination of Yonca Dervisoglu, Google’s vice president of marketing for Europe, Middle East and Africa, as an independent director of the company’s board. Speaking in English, the Turkish-born executive underlined the auspicious timing of her arrival.
“When the pandemic started, it felt like we were going into a tunnel in 2020. And when we came out of it, it almost feels like 2030. The predictions that we had in terms of e-commerce, in terms of number of people online, in terms of even people just starting to email for the first time, they were 2030 predictions that happened in two years. That’s an incredible pace,” she said.
“And I see that when I look at the search interest online for luxury. It’s gone, since the pandemic, 25 percent up, since 2020. So I think it’s a time of great opportunity for everyone: individuals, businesses, brands and certainly companies like Kering,” she added. “I cannot think of a company that’s better placed to take advantage of this digital revolution.”
In answer to a question from a shareholder, Pinault said the group was exploring options ranging from creating original digital products unrelated to its physical merchandise, to allowing its customers to make online purchases in cryptocurrencies. He noted that unlike physical products, NFTs could also be a source of recurring income for brands in the medium- to long-term.
“We’re exploring all of that at Gucci, at Balenciaga,” he said, noting that chief client and digital officer Grégory Boutté, who previously worked at eBay and several San Francisco-based start-ups, was spearheading the push.
“Know that we are ahead of the curve on these topics, but it’s very early. We’re lucky to have Yonca with us. We’re in touch with the teams at Google who are working on this as well, but also with the teams at Microsoft and Facebook,” Pinault said.
“It’s very interesting to see that the big-tech players differ a lot when it comes to the advent of this new internet,” he added, noting that while Facebook was very bullish on the metaverse (although it scaled that back a bit on Wednesday in reporting its financial results), Google was taking a more cautious stance.
“It’s very, very early days, so we have to keep an eye on what’s happening, but we must also be careful not to rush into it, because all of this is very new,” Pinault said.
Speaking at LVMH Moët Hennessy Louis Vuitton’s AGM last week, Arnault reiterated his skepticism about the metaverse, even questioning Facebook’s name change to Meta. “There’s no need to rush. We should be prudent,” he said, suggesting that digital fashions for avatars is not in LVMH’s DNA. “We want to sell real products.”
By contrast, Kering has already participated in several virtual initiatives, with Gucci selling a digital version of its Dionysus bag on Roblox for about $4,115, roughly 20 percent more than the physical object.
Another shareholder questioned why, despite posting a 21.4 percent rise in group revenues in the first quarter, Kering has seen its shares tumble by more than 28 percent since the start of the year. This compares with a 15 percent decline for LVMH, its larger rival.
Group managing director Jean-François Palus blamed factors including the war in Ukraine, inflation, the prospect of rising interest rates and the continued impact of COVID-19 in various parts of the world. Noting that Kering’s shares rose 19 percent in 2021 as a whole, he said there was no underlying reason for the stock price to suffer.
“There are a number of concerns that are making markets tense and volatile, and the luxury industry is not exempt of risks in this regard,” he said.
“However, industry observers, whether they’re analysts or investors, have not questioned the quality of the fundamentals at Kering, so it’s reasonable to expect that when market conditions and macroeconomic conditions in general become positive again, our stock price will also recover,” he added.
Pinault noted that Kering was able to compensate for the impact of inflation by raising its prices. “Yes, we are feeling the effects of inflation, but we can compensate for this inflation through the pricing strategy for different products,” he said.
The meeting also approved the nominations of Véronique Weill and Serge Weinberg, the latter joining the board 17 years after handing over the reins of the group, then known as PPR, to Pinault. Meanwhile, Daniela Riccardi’s term as an independent director was renewed.
Shareholders approved a dividend of 12 euros per share, up from 8 euros the previous year.
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