Gucci’s sudden announcement on Thursday is that Sabato de Sarno will leave as the creative director was a modest and modest conclusion of his short tenure at the helm of an Italian fashion house. In a brief press release, Kering, the gorgeous conglomerate that owns Gucci, issued a statement from De Sarno itself. Instead, it hits optimistic tones about the brand’s future, with executives expressing their enthusiasm for the “next chapter” of Gucci’s evolution.
The departure of De Sarno, who joined in January 2023, reflects the challenges facing Gucci, the crown jewel of Kering’s portfolio. De Sarno, hired by Marco Bizzarri at the time, who left the post amid pressure in mid-2023, was widely viewed as transitional. His mission: to bring Gucci back to growth after a few quarters that has stagnated sales and waned consumer excitement. However, his tenure is short-lived and ends before the standard three-year contract is completed, with the inherent challenges in revitalizing the brand of Gucci’s size and cultural significance.
A stalled turnaround
De Sarno’s tenure was plagued by challenges from the start. Delays in the supply chain have made his debut collection slower to reach stores, preventing immediate impact on sales. Furthermore, the physical environment of Gucci’s retail space is heavily influenced by the influence of the maximalist aesthetics of his predecessor, Alessandro Michele, with de Sarno’s more minimalist and classic approach. It’s covered. In many cases, store updates, which are key elements in repositioning a brand’s image, were not made due to budget considerations and concerns about declining sales.
Gucci’s new CEO, Stefano Cantino, who took on his role in January, inherited the Flax brand, but was hired to manage the designer’s transition. The ongoing question is whether a fully operational, fully operational, and fully overhaul is required to rekindle consumer interest and restore Gucci’s growth trajectory. With Gucci making up almost 60% of Kaeling’s profits, the interests of Cantino and Kering’s chairman François Henri Pineau are high.
A difficult battle
The appointment of De Sarno has always been a risky bet. The little-known external industry circle, his previous role as design director for Valentino, did not bring him any well-known creative influences associated with many other high-end creative directors. However, his minimalists resonated with some customers, particularly through accessories such as Oxblood-Red leather products and reworked handbag silhouettes. Still, moving the needle to the overall sales wasn’t enough.
Gucci’s sales fell 14% year-on-year in the third quarter of 2024, with its parent company increasingly pressure to reverse the trend. Kering’s upcoming revenue calls will be closely monitored next week, with analysts expected to question the lack of a clear artistic direction for Gucci, the most important revenue driver.
A familiar pattern
Gucci’s creative sales have fueled speculation that who might take the reins next. Rumors about the fashion industry are already on overdrive, with Dior’s creative director Maria Graziaciuri reporting he is in talks with Kering. Others have promoted Hedy Sliman as a potential candidate after his tenure at Celine. It remains to be seen whether Kering will take a more cautious route than hiring more careful designers or choose unknown talent.
Francesca Bellettini, the assistant CEO of Kering, who is in charge of brand development, is diplomatic but ambiguous in her comments, and De Sarno appreciates his “loyalty and professionalism.” No hints were provided regarding the circumstances of his departure or the timeline for appointing a successor.
In addition to the plot, insiders reported that Gucci had internally distributed memos announcing new designers working under De Sarno. While De Sarno may know his fate, there is a lot of speculation that he wanted to continue pretending to be business as usual during Milan Fashion Week.
High Kering Stakes
Gucci’s performance is important for Pinault, which has recently refocused Kering’s strategy to improve profitability and expand into the ultra-high-end category. The brand’s decline is in contrast to rivals such as LVMH’s Louis Vuitton and Hermes, and has successfully changed consumer preferences in a post-pandemic world.
Investor confidence in Kering has already been shaken by Gucci’s struggle. The company’s stock has slowed the performance of its colleagues over the past two years, and analysts are calling for more decisive action to revive the fate of the House. Further delays in the appointment of new creative directors may promote additional uncertainty.
The results for next week’s quarter are not just due to Gucci’s ability to maintain its position not only in the near future, but also in the increasingly competitive luxury market. For now, the slate has been wiped clean again with Gucci, looking for a new creative visionary already underway. The only certainty is that the next chapter of Gucci’s story will be scrutinized in detail by both the fashion world and investors.
