Alexander McQueen Cuts 20% of Staff Amid Kering's Broader Luxury Overhaul

Fashion house Alexander McQueen is set to reduce its workforce by 55 positions at its London headquarters, a move confirmed by its French parent company, Kering. This cut represents 20% of the brand's staff and comes as Alexander McQueen grapples with a downturn in sales. The layoffs were initially reported by Women's Wear Daily and are part of a broader strategic review underway across Kering's luxury brands.

The restructuring effort aligns with the arrival of Kering's new chief executive, Luca de Meo, who was appointed in June after being recruited from automaker Renault. De Meo's primary mandate is to address a significant revenue slump and reduce the company's debt. The strategic review is designed to optimize performance and efficiency across Kering's extensive portfolio.

Kering itself reported a 10% drop in overall sales for the third quarter, with revenues declining across most of its top brands. While specific sales figures for Alexander McQueen were not released, Kering noted that the brand's "decline in revenue moderated thanks to higher women's ready-to-wear sales." Jean-Marc Duplaix, Kering's chief operating officer, commented during the quarterly results presentation that the company would "review, of course, in a very open manner, as we already always did, the relevance of the assets we have in the portfolio."

In a statement provided to WWD, Alexander McQueen clarified its position, stating: "As part of a comprehensive strategic review of our global operations, we are restructuring our UK head office and reducing complexity across our international markets." This indicates a deliberate effort to streamline operations and enhance efficiency on a global scale, beyond just addressing immediate sales challenges.

Despite the overall sales decline, Kering's third-quarter results surprisingly exceeded analyst expectations, leading to an 11% surge in its shares on the Paris stock exchange on Thursday afternoon. Deutsche Bank analyst Adam Cochrane highlighted the positive market reaction, noting in a research note that "Kering published results even better than expected, and expectations were already high."

In a separate significant development this week, Kering also announced its decision to sell its beauty products division to L'Oreal for a substantial 4.6 billion euros, equivalent to approximately $5.3 billion. This move further underscores Kering's ongoing strategic re-evaluation and its efforts to reshape its brand portfolio and financial structure.