Kering‘s new CEO Luca De Meo plans to set up a new unit to scout for up-and-coming brands to invest in, documents seen by Reuters show, as he seeks to tap new revenue streams and trim the group’s reliance on struggling Gucci.

The move would see the unit, named “House of Dreams”, given long-term capital to take stakes in or partner with emerging businesses, as wealthy shoppers have increasingly turned their backs on traditional luxury brands.

The plan, shared in a memo with senior staff in October and previously unreported, gives insight into de Meo’s wider strategy to revamp the $20 billion luxury conglomerate ahead of a much-awaited investor presentation next spring. The French group, controlled by the billionaire Pinault family, in October registered the “House of Dreams” trademark in France, the website of the National Institute of Intellectual Property (INPI) shows.

In the memo, De Meo cited areas such as experiential tech, Indian craftsmanship, and “culture-led” Chinese luxury as playing fields for the new unit. He didn’t say how much it might invest.

Kering said in a statement that its “number one priority” was to boost growth by strengthening its existing brands, adding: “At the same time, Kering is preparing for all the possible futures of luxury, whether new business models, new services, or new geographies.” The group added that the elements that have been shared with staff were “preliminary working assumptions” that are still evolving ahead of its strategy presentation next year.

Kering shares fell by 3.5% on Wednesday after Reuters reported that de Meo, who took over in September, had set a three-year timeline to get back to “top financial performance.” He has laid out plans to bring down what he called an “over-dependency” on Gucci, citing a shortened version of a strategy memo.

In a more detailed version of the memo seen by Reuters, de Meo called the House of Dreams unit a “central proposal” of his thinking. De Meo also said he looked to “de-risk” exposure to Gucci and “rebalance” the weight of fashion in Kering’s profits in the long term. Fixing Gucci, which currently accounts for roughly half of Kering’s operating profit, down from two-thirds in 2022, is cited as a priority in the memo.

De Meo said in the memo that the new investment arm- which has echoes of moves by rival luxury house LVMH and beauty giant L’Oreal– would look to take minority or majority stakes for the long term and leverage Kering’s access to wealthy shoppers.

The move is also reminiscent of de Meo’s restructuring of Renault announced in 2021, when the Italian, then CEO of the French carmaker, created “Mobilize,” a new division specifically working on tech innovation and alternative mobility concepts.

The push to scale up promising brands in-house also reflects limited room for acquisitions due to Kering’s high debt loads. In the memo, de Meo said the new unit should focus on experiential tech and regional luxury models during an initial pilot phase of 90 days, with a seed fund and dedicated team. It wasn’t clear when the division would start operating.

European luxury brands saw their client base shrink after years of aggressive price hikes, though the over $400 billion global market is expected to rebound next year after a flat 2025, according to a Bain study published this week.

Meanwhile, emerging niche companies from buzzy Korean beauty brands to Chinese jewellers have seen stellar growth. More and more clients have also turned to experiences like wellness and fine dining instead of handbags and dresses.

Kering’s shares have rallied over 70% since de Meo was announced as the firm’s new CEO in June, reaching their highest level since July 2024.