Pinaults’ Artemis Says Not Facing Financial Strain Despite Kering Woes

A jump in standalone debt at Artemis, the Pinault family company that controls Gucci-owner Kering, is a “temporary spike”, and the company is not facing any liquidity problems due to a drop in dividends from Kering and other assets, it told Reuters.

The investment vehicle also said that none of its debt was tied to Kering’s share price performance in the terms - or covenants - agreed with lenders, as some investors have speculated.

Privately-owned Artemis, chaired by outgoing Kering boss Francois-Henri Pinault, is the top investor in the French fashion and leather goods heavyweight, with a 43 percent stake, and controls it through a majority of voting rights.

It has become the subject of increased scrutiny from investors after Reuters reported it had accumulated high debt across its portfolio as it sought to diversify investments.

Some analysts are concerned the high debt level could limit Kering’s ability to deliver a turnaround at struggling flagship label Gucci, at a time when major rivals such as Louis Vuitton owner LVMH are investing heavily in their brands.

“We have no liquidity problems,” Artemis said in a statement, responding to Reuters questions about its finances.

It added that the holding company had less than €500 million ($577 million) of debt maturing over the next two years, and more than €1 billion of available cash.

Debts and Dividends

Artemis, which also owns 54 percent of Hollywood talent agency CAA and a 29 percent stake in sportswear maker Puma, has historically kept a low media and investor profile.

But annual accounts published alongside a recent bond issue give some insight into its finances.

Artemis’ consolidated group debt stood at €26.7 billion at the end of 2024, almost double the amount of two years earlier. Kering, the largest asset consolidated in the accounts, held around €14 billion of total debt at the end of 2024, built up in large part to finance an acquisition strategy spearheaded by Pinault to counter a slowdown at Gucci.

On a standalone basis, which excludes operating businesses such as Kering, Artemis’ debt was €7.1 billion as of May 31, the company said when announcing the bond issue last month.

Last year, Artemis paid €227 million in net interest charges to service its growing debt pile, Artemis’ 2024 accounts show, up from just €60 million the year before.

In its statement, Artemis said the €7.1 billion of debt was a “temporary spike, only linked to the acquisition of CAA in 2023”, which it said was driven by a desire to diversify beyond Europe and the luxury industry.

The value of the majority stake in the Hollywood talent agency, which represents A-listers like the Obamas and Scarlett Johansson, was $3.7 billion in Artemis’ 2023 accounts. The whole agency has been valued at $7 billion.

Just as Artemis is spending more to service its debt, dividend payments from Kering, which accounted for more than 80 percent of its financial income in the last two years, are falling.

Kering slashed total dividends paid on its 2024 earnings, to €739 million from €1.7 billion a year earlier, after a string of profit warnings.

Barclays analysts estimate the payout may drop to €364 million in 2026 due to Kering’s poor performance this year. Artemis is entitled to roughly 43 percent of Kering’s payout.

Kering declined to comment.

Puma, which in the last two years contributed €35 million to Artemis’ annual dividend income according to Artemis’ accounts, also cut dividends paid out this year by roughly a third and warned it would be loss-making in 2025.

Covering Needs

“It is incorrect to assume that we are dependent on Kering’s dividend flows to finance the company. In fact, other companies in the Group pay regular and significant dividends which cover most of our debt servicing needs,” Artemis said, without elaborating.

Besides its stakes in Kering, Puma and CAA, Artemis owns historic auction house Christie’s, some exclusive wineries and a company offering polar cruises, all of which are unlisted.

Without Kering, Artemis’ businesses generated a recurring operating profit of €48.9 million in 2024, up from a 115-million-euro loss the year before, its 2024 accounts show.

Kering shares have lost close to 60 percent of their value over the last 24 months, while Puma shares are down 66 percent in the same time.

In a recent note focusing on Artemis’s finances, BofA analysts said trading activity and feedback they had received suggested some investors were worried that Artemis’ loans might have covenants tying them to Kering’s stock performance.

Artemis said such speculation was misplaced. “The Group has no financial covenants linked to Kering’s share price”, it said.

June’s bond issue tied to Kering’s share performance - worth €400 million and used to refinance an old bond linked to Puma’s stock - was oversubscribed, Artemis said.

By Tassilo Hummel; Editor: Lisa Jucca, Mark Potter

Learn more:

Francois Pinault’s Wealth Slides as Heir Fails to Revive Gucci

The 88-year-old founder of Kering SA has seen his net worth drop by 29 percent to $18.6 billion since August 2021.