Published by Global Banking and Finance Review
Posted on July 29, 2025
By Tassilo Hummel
PARIS (Reuters) -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% 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 euros ($577 million) of debt maturing over the next two years, and more than one billion euros of available cash.
DEBTS AND DIVIDENDS
Artemis, which also owns 54% of Hollywood talent agency CAA and a 29% 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 euros 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 euros 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 euros as of May 31, the company said when announcing the bond issue last month.
Last year, Artemis paid 227 million euros in net interest charges to service its growing debt pile, Artemis' 2024 accounts show, up from just 60 million euros the year before.
In its statement, Artemis said the 7.1 billion euros 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% of its financial income in the last two years, are falling.
Kering slashed total dividends paid on its 2024 earnings, to 739 million euros from 1.7 billion euros a year earlier, after a string of profit warnings.
Barclays analysts estimate the payout may drop to 364 million euros in 2026 due to Kering's poor performance this year. Artemis is entitled to roughly 43% of Kering's payout.
Kering declined to comment.
Puma, which in the last two years contributed 35 million euros 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 euros in 2024, up from a 115-million-euro loss the year before, its 2024 accounts show.
Kering shares have lost close to 60% of their value over the last 24 months, while Puma shares are down 66% 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 euros and used to refinance an old bond linked to Puma's stock - was oversubscribed, Artemis said.
($1 = 0.8674 euros)
(Reporting by Tassilo Hummel. Editing by Lisa Jucca and Mark Potter)
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