The Plan for McQueen

LONDON — “McQueen is not for sale,” says owner Kering. Instead, the French group is accelerating efforts to restructure and reposition the British brand after years of losses. The moves are part of a three-year roadmap aimed at returning the label to profitability and delivering sustainable growth.

As part of the push, McQueen aims to maintain its luxury image while leaning into more accessible price points, betting that the fearless, non-conformist attitude at the core of the label founded by the late Lee Alexander McQueen will resonate with younger customers who may have previously been priced-out of the brand, according to sources with direct knowledge of the strategy.

McQueen will also shrink its retail network, shed staff and cut men’s from its runway proposition in a bid to adopt a more efficient business model and right-size its operations. The store closures will focus on less strategic markets where the label will transition to a wholesale-led model. The brand will eliminate as many as 55 roles in its UK headquarters, as well as streamlining functions in international markets.

“McQueen has launched a programme aimed at returning the business to sustainable profitability over the next three years,” the brand said in a statement. “This is a cultural, creative and business reset; it’s not just a cost-cutting exercise.”

McQueen began reviewing its business model two years ago.

Going into the 2020 pandemic, the label was Kering’s fastest-growing brand, fuelled by aggressive retail expansion and sales of its hit oversized sneaker. At its peak, the white, thick-soled model drove more than 40 percent of McQueen’s overall revenue, according to people familiar with the matter. But as its popularity gradually cooled, the brand’s overreliance on the product, in part a consequence of its failure to develop a winning handbag, along with dramatic cuts to wholesale distribution, dragged down sales.

In October 2023, Kering hired designer Seán McGirr to replace Sarah Burton, Lee McQueen’s former right hand and successor, who abruptly left the brand the month before. McGirr’s collections have met with a mixed reception from critics and buyers even if Kering flagged improving trends last quarter: “At McQueen, the decline in revenue moderated thanks to higher women’s ready-to-wear sales,” the group said in a statement.

Lee McQueen was a master tailor as well as a bad-boy iconoclast and it’s unclear whether McGirr has what it takes to deliver the intoxicating mix of craft innovation and raw edge that’s core to the brand’s identity, even though more basic items like sneakers and skull scarves drive a large chunk of sales. Key design talent in tailoring and flou has exited the brand this year.

According to analyst estimates, annual revenues have fallen below €200 million, far short of Kering’s one-time ambition to turn McQueen into a billion-euro brand and a major retreat from the more than €800 million the label generated at its peak. Kering does not break out results for its smaller brands, but in a July call with investors, finance chief Armelle Poulou noted that the group’s “Other Houses segment posted a recurring operating loss of €29 million in the first half, largely attributable to McQueen.”

Kering could always change course and offload McQueen. The group has been reviewing its portfolio and recently sold its entire beauty unit to L’Oréal for $4.6 billion. But it’s unclear what the lossmaking McQueen would fetch in the current market and, for now, the company is pushing ahead with a reboot.

Whether it will work remains to be seen.

Major reductions to McQueen’s retail network could pull the brand back into profitability. Meanwhile, customers are thirsty for accessible entry points to luxury fashion after the sharp price hikes of recent years. “There is, at the moment, significant space in the premium market — as high-end brands have increased prices. So, in theory, the opportunity is there,” said Bernstein analyst Luca Solca.

When McQueen “suspended” its McQ diffusion line in 2022 amid a push upmarket, it was cautious about moving those price points into its mainline stores. It may not be too late.

But leaning into lower prices while maintaining the integrity of McQueen’s DNA could prove a tricky balancing act. Lee McQueen was one of the most revered designers of his generation. “Savage Beauty,” a retrospective of his work at New York’s Met Museum in 2011, the year after his suicide, broke attendance records at the time, a testament to both McQueen’s popular appeal and status as high art.

Industry insiders and fashion fans alike may recoil if his legacy is dumbed down.