Luxury giant Kering (PPRUY) is planning to enter the AI-powered eyewear market by launching smart glasses under its Gucci brand, according to Reuters. CEO Luca de Meo said that the product could launch around 2027, in partnership with tech titan Google (GOOGL), and would make Gucci one of the first major luxury brands to move into this space. As a result, Kering would compete directly with EssilorLuxottica (ESLOY), which already makes Ray-Ban smart glasses with Meta Platforms (META).
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Importantly, this project is part of a bigger plan to grow Kering’s smaller business segments. Specifically, De Meo is focusing on expanding the company’s eyewear and jewelry divisions, which currently make up only a small part of total revenue. In addition, this strategy is meant to reduce the company’s reliance on Gucci, which has struggled in recent years as fashion trends have changed. Kering is also working to strengthen Gucci itself and improve overall profitability.
In fact, De Meo said that the company wants to more than double its operating margin and bring Gucci back in line with other top luxury brands. To do this, he believes Gucci needs to return to its most recognizable styles, rather than overusing or moving away from them. At the same time, he pointed out that global challenges, including geopolitical tensions and weaker travel demand, are forcing luxury companies to adjust. Because of this, Kering is shifting toward a more flexible strategy by adapting to different regions rather than using the same approach everywhere.
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Turning to Wall Street, analysts have a Strong Buy consensus rating on GOOGL stock based on 26 Buys and five Holds assigned in the past three months. Furthermore, the average GOOGL price target of $385.97 per share implies 14.2% upside potential.
