McQueen’s Strategic Restructuring for Sustainable Growth
Kering’s Commitment to McQueen
LONDON — Kering, the owner of McQueen, has made it clear: “McQueen is not for sale.” Instead, the French luxury group is intensifying efforts to reshape and reposition the iconic British brand following years of financial losses. This initiative is part of a three-year strategy focused on restoring profitability and fostering sustainable growth.
Embracing Accessibility While Retaining Luxury
As part of its revitalization strategy, McQueen aims to uphold its prestigious luxury image while catering to a broader audience with more accessible price points. The brand is betting on the fearless and non-conformist ethos established by the late Lee Alexander McQueen to attract younger consumers who may have felt alienated due to high prices.
Operational Efficiency: Shrinking Retail Network
To streamline operations, McQueen plans to reduce its retail footprint, lay off staff, and eliminate men’s offerings from its runway presentations. These steps are intended to create a more efficient business model. The closures will primarily focus on less strategic markets, shifting to a wholesale-led approach to optimize scale and performance.
A Shift in Leadership and Creative Direction
In a significant move, Kering appointed designer Seán McGirr to succeed Sarah Burton, McQueen’s former creative lead, who departed unexpectedly. While McGirr’s initial collections have garnered mixed reviews from critics and buyers, Kering has noted a moderation in revenue decline, driven by improved sales in women’s ready-to-wear.
Challenges in Revitalizing the McQueen Brand
McQueen’s transformation is not without its challenges. Analyst estimates suggest that annual revenues have dropped below €200 million, a stark contrast to Kering’s previous ambition to elevate McQueen to a billion-euro brand. The brand has struggled with an overreliance on its once-popular oversized sneaker, contributing to a decline in overall sales.
The Market Context: Opportunities Await
Despite the obstacles, there is optimism surrounding McQueen’s future. The luxury market is seeing a demand for accessible entry points, particularly after years of steep price increases. Bernstein analyst Luca Solca points out that significant gaps in the premium market present potential opportunities for McQueen to regain its footing with a refreshed pricing strategy.
Maintaining McQueen’s Legacy
While the brand aims to appeal to a wider audience, balancing affordability with the integrity of McQueen’s storied legacy will require careful navigation. Lee McQueen’s legacy as a revolutionary designer remains pivotal, and there are concerns that diluting the brand’s artistic essence could alienate devoted fans and industry insiders alike.
As McQueen embarks on this intricate journey of transformation, the fashion world watches closely to see if the brand can successfully reconcile its heritage with a fresh, sustainable vision for the future.
