Kering, the luxury group that owns brands such as Gucci and Yves Saint Laurent, experienced a surge in shares by over 6% following the announcement of a major management reshuffle. This move is aimed at revitalizing sales at Gucci, which has fallen behind competitors Louis Vuitton (LVMH) and Hermes in recent years. The pandemic has had a significant impact on the luxury fashion industry, and Gucci has struggled to keep up with the rebound experienced by its rivals.
Marco Bizzarri, who has been leading Gucci since 2015, will be leaving the company in September. In his place, Jean-Francois Palus, the managing director and right-hand man of Kering billionaire boss Francois-Henri Pinault, will take over as Gucci’s new CEO and president for a transitional period. Meanwhile, Francesca Bellettini, the current head of Yves Saint Laurent, has been appointed as Kering’s deputy chief in charge of brand development. Jean-Marc Duplaix, the group finance chief, will assume the role of Kering deputy CEO in charge of operations and finance.
These changes are part of a strategic effort to steer Gucci in a new direction. The brand currently accounts for half of Kering’s sales and nearly two-thirds of its operating profit. Analysts have generally responded positively to the reshuffle, although they do not expect an immediate turnaround in Gucci’s performance. Akros analysts stated, “The change of CEO at Gucci risks further prolonging the current transition phase of the brand, though it also shows the commitment of the group to go for a more decisive and effective relaunch, tightening the grip on the brand.”
Under the leadership of Marco Bizzarri and designer Alessandro Michele, Gucci experienced remarkable growth between 2015 and 2019. The brand became one of the world’s fastest-growing, with sales doubling to nearly €10 billion. Michele’s gender-fluid and eccentric style resonated with young shoppers in China, contributing to Gucci’s success. However, growth has slowed down since then, while LVMH’s Louis Vuitton has gained market share through significant marketing investments.
Following Alessandro Michele’s departure from Gucci in November, rumors began circulating about Marco Bizzarri’s future at the company, as the two had worked closely together for years. The challenge for Gucci now is to prevent any further decline in its market position. Sabato De Sarno, Michele’s successor and the former fashion director of men’s and women’s collections at Valentino, will showcase his first collection for Gucci in September. However, his designs will not be available in stores until late 2023.
In conclusion, Kering’s management reshuffle at Gucci has generated optimism among investors, as the luxury group aims to revive the brand’s sales. The appointment of new leaders and the strategic realignment of roles within Kering demonstrate the company’s commitment to reinvigorating Gucci’s performance. However, it remains to be seen how quickly these changes will translate into tangible results for the brand.