There’s a Snake in My Boot!

Sammanfattning: Kering is a multi-player in the luxury industry, owning high-end brands such as Gucci, Saint Laurent, Alexander McQueen, among others. A range of product lines of these brands use exotic skins as raw materials. Some argue that the use of such materials is too cruel and that the animal welfare cannot be guaranteed. On the other hand, exotic skins are presented as more sustainable than other types of textiles, such as bovine leather, which generates a higher ecological footprint. In terms of consumers, nowadays they are demanding ethical behaviors throughout the value chain. With this demand, it can be seen clearly that consumers are gearing towards responsible consumption. Responsible consumption includes not only sustainability for the environment, but also the ethics for animal welfare, although, there are also buyers who prefer style and fashion over animal welfare. Looking closer into the industry, Kering competitors have taken different stands regarding this matter. On the one hand, fashion companies such as Hermès and LVMH have decided to invest in operating their own farms in order to secure high quality materials. Whereas, Chanel and Victoria Beckham have decided to ban the usage of exotic skins. These opposing stands have created a new battleground in the luxury industry. The discussion of the case is focused on deciding whether Kering should or should not continue using exotic skins as raw materials. The following are proposed as the main arguments to be discussed: Assuming the role of Kering top management, you are required to take a decision. Should Kering continue or stop using exotic skins across their fashion and leather brands? What are the reasons for the decision taken? How would the decision be communicated to the stakeholders? And, what actions would be undertaken to ensure a successful implementation of the decision taken? Due to the status of luxury that exotic-skin products lend to the companies, by making it possible for their brands to reach the wealthiest clientele, Kering has decided to continue using exotic hides. With the decision taken, Kering approached the controversial issues that could arise from the continuation of exotic skin usage by including ethical and sustainable practices. For instance, they are investing in a full ownership of a python farm in Thailand. This is how they can ensure that animals, farmers, and the environment are treated in compliance with ethical standards. Moreover, they have made partnerships with Trade Centers, in order to drive the improvement of the animals’ welfare in their own habitats, while also guaranteeing the livelihood of the communities that supply the skins. They state their commitment to preserve the heritage and traditions of these communities. Finally, they developed the Kering standards for raw materials and manufacturing processes which aim to ensure the traceability of their key raw materials.