Why Kering Is Concerned About Gucci's Financial Performance

French luxury group Kering has announced a major management overhaul, parachuting in a transitional leader at Gucci to fix underperformance at its biggest brand and naming two deputy chief executives.
The moves unveiled by chair and chief executive François-Henri Pinault on Tuesday are part of an effort to give a new direction to the group that in recent years has struggled to deliver growth at the pace of sector leader LVMH or leather specialist Hermès.
Gucci CEO Marco Bizzarri will step down in September and be replaced on a temporary basis by Jean-François Palus, described by billionaire owner Pinault as his “right-hand man and daily sparring partner”.
Rising star Francesca Bellettini, who has led an expansion at Yves Saint Laurent since 2013, will become deputy Kering chief executive for brand development, with all of the group’s brands reporting to her to steer “their next stages of growth”. Chief financial officer Jean-Marc Duplaix will be the other deputy CEO, overseeing operations and finance.
With Kering shares continuing to trade at a significant discount to LVMH and Hermès, analysts have questioned the group’s overreliance on Gucci, which brings in half of sales and two-thirds of operating profit.
The brand went on a growth tear under the dual leadership of Bizzarri, a former management consultant who helped transform Bottega Veneta into a billion-euro brand, and star designer Alessandro Michele. They more than doubled sales from €3.9bn in 2015 to €9.7bn in 2019 before the pandemic hit.
Michele’s maximalist, eclectic and gender-fluid aesthetic was a hit with young shoppers in China and the US, but the novelty eventually wore off leading growth to sputter despite several promised turnrounds.
VIA THE FINANCIAL TIMES: www.ft.com/content/34b0fa44-4...
MY E-BOOK (EFFECTIVE WAYS TO LEARN ABOUT FASHION): www.thefashionarchivemag.com/...
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#fashion #luxury #style

[@pur3lvett186]

Ayo please keep making these type of videos! You are literally the pinnacle of fashion journalism 🔥

[@jadyassine8484]

Re: Balenciaga: Summer 23 show notes Demna: I've decided to no longer explain my collections and verbalize my designs. *Scandal happens* *5 months later* Winter 23 show notes Demna: Tailoring is deconstructed and reconstructed from pants, placing inverted waists at hems...

[@understitchYT]

imo this era of Gucci is purposeful. I think that post-Michele, theyre trying to have a period where they're not the centre of the universe, taking a breather to prevent overexposure and to allow the other Kering brands a time in the sun to grow them

[@FashionRoadman]

I can definitely see how this could be the case. I’ll be watching with great intrigue over the coming years to see how they gradually filter back the exposure

[@mrdecember]

I think everyone in fashion has their eyes peeled for what Gucci decide to do next, and where Alessandro Michele heads next!

[@TheLuxuryHybrid]

Balenciaga is tainted in my eyes. Unless they get rid of the CD, I will NEVER wear them. Demna has too many relations with twisted ppl involved in the scandal. It’s truly disgusting if you research the props subliminal messages that were involved in the two campaigns.

[@sleepysartorialist]

Frankly even getting rid of Demna wouldn't change my mind at this point. I just can't justify spending my limited cash there and being uncomfortable being seen wearing the stuff in public. Not worth it even if i like a lot of their pieces.

[@FashionRoadman]

With Kering shares continuing to trade at a significant discount to LVMH and Hermès, analysts have questioned the group’s overreliance on Gucci, which brings in half of sales and two-thirds of operating profit. The brand went on a growth tear under the dual leadership of Bizzarri, a former management consultant who helped transform Bottega Veneta into a billion-euro brand, and star designer Alessandro Michele. They more than doubled sales from €3.9bn in 2015 to €9.7bn in 2019 before the pandemic hit. Michele’s maximalist, eclectic and gender-fluid aesthetic was a hit with young shoppers in China and the US, but the novelty eventually wore off leading growth to sputter despite several promised turnrounds. - Via The Financial Times www.ft.com/content/34b0fa44-4964-49bd-b386-3b72b9c61484

[@blackvirgo09]

I believe at kering alexander mcqueen is the biggest brand. It also look the best in terms of style and luxury and coolness

[@arli6226]

Miss Alessandro’s 70s charm

[@fi-train8961]

Same! Love his style and work 😢

[@burgersuperking]

Only Vaccarello's YSL seems to be doing good so far, hopefully. But there are stupid rumours that they want to discontinue all Hedi's old stuff, that doesn't make any sense. I noticed that McQueen is popping up here and there more and more

[@ladyjunon6305]

Bottega Veneta is doing decently too, but Saint Laurent is definitely Kering's "favourite child" right now. They probably won't discontinue Hedi's stuff as it's does consistently well. That said, I think that they want to focus a bit more on strengthening the seasonal menswear offering, considering the show they held in Berlin back in June. With how Kering is going, I believe that they plan on growing Saint Laurent to the point that Gucci is no longer Kering's only main source of income. Bottega Veneta, Alexander McQueen and Balenciaga are relatively small in comparison to those two.

[@jubbi]

i kinda feel like some designers are forgetting that people actually care about their clothes and are too busy trynna impress / make some kinda press / social engagement -sigh-

[@damilarearah]

when they are opening a new market you have to have hyper growth the fact you aren't capturing the market is a bad time, that reflects bad on the business which reflects bad on the stock price, which reflects bad on the dividends all leading to people selling shares and making the business look terrible

[@voxclan4659]

I WOULD LOVE WALES BONNER OR HAIDER FOR GUCCI

[@josipag2185]

I am half italian living in Spain and never consider Prada with thiss Guess like triangle a quite luxury brand. Gucci needs new Tom Ford, there is no need for Gucci to be quite. Actually, Hermes is not quite, too. Chanel no way, they are like Gucci these days. So if they are not quite, if Cartier and VC&A for sure are not (maybe Omega is), like what is the point? The Row sure, they can do their thing. Like Ferragamo, or Loro Piana, etc that could pass as quite, for sure. And Balenciaga? OMG, the guy closed his house and returned to Spain, and these took his name and pretend to play some legacy, that is just crime what they did to Baleniaga name, and they get away with the murder. I just, can't even think of it, it literally provokes me nausea.

[@padraiccosta4644]

Balenciaga keep making the same collection over and over again demna keeps doing the same bdsm looks over and over again you think after the scandal he would of moved away from that I think it’s killing the brand just saying

[@ladyjunon6305]

I just think Demna stopped caring. Chances are his contract will end soon, but Kering probably doesn't want to deal with two vacant houses at one time. They'll probably announce his departure after Sabato is settled at Gucci.

[@padraiccosta4644]

@@ladyjunon6305 big facts

[@monsieurgolem3392]

Oversized something thats 5 times the price it should be.

[@padraiccosta4644]

@@monsieurgolem3392 big facts

[@LittleMissDeeDee]

I think modern day Balenciaga is less about fashion and more about controversy and sales.

[@mrandmrscorona8658]

Gonna miss Alexander… just bought a GG pillow…new loafers look great!

[@Sept1973]

Gucci is about to launch in September the new creative director Sabato De Sarno i think this will change the trajectory of Gucci.

[@blackvirgo09]

I hope it's good if not the doing down

[@abstudio24]

I hear Balenciaga still not doing well after that controversy and kanye leaving, even the runway show recently. Kering brands not all that anymore.

[@leonard5509]

The Question is why Balenciaga reacts to this by quadruppling their prices

[@mrdecember]

@@leonard5509 Honestly it seems like every luxury house is at this point. Even brands I would have never expected it from like Loewe appear to be hiking prices or simplifying handbag construction to make it cheaper to produce

[@monsieurgolem3392]

Stop, Kanye brought nothing to Balenciaga except the same designs he stole from Nike or somewhere.

[@jonnyfendi2003]

Kanye brought everything to the fashion circuit. His whole damn crew turned fashion on its head. From Matthew Williams , Virgil, etc as well as damn designers copying his look to the damn blueprint. Go look at that yeezy gap jacket that had everyone going crazy that is right now being sold by Loewe. Kanye IS the culture he cant be dismissed so easily

[@lvbadboy]

Balenciaga was just purchased by Kering and was never fashionable or quality once Demna was hired. It was just for fashion victims and hype beast ultra tacky

[@burgersuperking]

Oh, what was not mentioned, Kering bought Creed, so Creed Aventus is Kering Beaute now, and this is some major s*t. Next they need to get YSL Beauty back from the L'Oreal yoke, and make a bombastic Demna's perfume.

[@chinadollfmd]

Now that Dua Lipa has been featured to wear Gucci, there might be revival.

[@jonnyfendi2003]

Oh yeah a d list pop star fronting a brand that will do it smh get back to me when Taylor Swift is their ambassador

[@teoleno4019]

Not really. I think it cheapens Gucci even more.

[@lvbadboy]

Balenciaga was never going to have longevity it was made for ppl who aren’t fashionable but hype beast

[@monsieurgolem3392]

Quiet luxury, give me a break, thats just a way for people to spin not having money or, not knowing how to dress.

[@donnapug]

Umm “quiet luxury” is the epitome of having money! Just because TikTok deemed it a trend doesn’t mean it doesn’t exist. It was here before and will remain long after the trend! If you don’t like it that’s ok, but know what you’re referring to when criticizing something

[@monsieurgolem3392]

@@donnapug I can buy counterfeitt items items and if I keep it modest convey the same "quiet luxury" look.

[@teoleno4019]

It's just Scandinavian minimalism. People in Northern Europe have always dressed like that, it's just that now it is mainstream.