Kering Unveils ‘House of Dreams’: Luca De Meo’s Investment Arm Targets Modern Luxury

Kering is opening a new avenue to transform its business model. Luca de Meo, CEO of the holding company since September, plans to create House of Dreams, a unit aimed at identifying, financing and scaling emerging brands with global potential, according to documents consulted by Reuters.

The project, shared with senior management in an internal communication in October, has not been made public until now. Kering contemplates launching a fund with long-term capital to take minority or majority stakes in growth companies. Its aim is twofold: to generate new sources of revenue and reduce the weight of Gucci, the brand that still contributes around half of the group’s operating profit.

The bet comes in a context in which high-end consumers are moving away from traditional luxury and towards experiences, wellness and niche proposals. The internal document identifies as areas of interest experiential technology, Indian craftsmanship or Chinese luxury linked to contemporary culture.

The House of Dreams unit is emerging as one of the central axes of the plan that De Meo will present to investors in the spring. In October, the group registered the House of Dreams brand with the French National Institute of Industrial Property (INPI), consolidating the project at the legal level before its operational launch.

Kering launches a unit dedicated to financing emerging brands

Kering has said its “number one priority” remains driving growth for its existing brands, but admits it is working on “all possible luxury futures,“ including new business models, services and geographies. The elements shared with staff, the group qualifies, are “preliminary assumptions” that will continue to evolve.

Market pressure is evident. Kering shares have fallen after Reuters revealed that De Meo is working with a three-year horizon to regain “maximum financial performance,“ with a focus on curbing overexposure to Gucci.

The internal memo also reflected the influence of De Meo’s time at Renault. There, in 2021, he launched Mobilize, a division dedicated to technological innovation and new services. House of Dreams pursues a comparable objective in the luxury sector, which is to create a laboratory to finance innovation and scale businesses without the need for large acquisitions.

The group recognizes a limited capacity for large corporate transactions due to its level of debt. Therefore, the new unit will focus on more flexible projects, with a 90-day pilot period, its own team and a seed fund.

Similar moves by LVMH and L’Oréal, which have spent years building internal structures to identify opportunities in emerging categories such as Korean cosmetics, Chinese jewelry and experiential luxury, stand out among the sector’s parallels.

De Meo’s arrival has been supported by the market: Kering shares have rallied more than 70% since his appointment in June, reaching highs not seen since July 2024. But the operational challenge remains intact.

Gucci, which came to represent two-thirds of operating profit in 2022, remains the reorganization priority. House of Dreams is integrated as a complementary lever in that strategy with the aim of rebalancing the profit structure, diversifying geographies and preparing the conglomerate for a less predictable and more fragmented luxury.

Kering closed the third quarter with revenue of €3.4 billion, down 5% on a like-for-like basis. The decline marked a clear improvement over the previous quarter, when sales fell 15%.