Despite facing disappointing sales results, French luxury group Kering is still confident in the future of its flagship brand, Gucci. In the third quarter of 2023, Gucci experienced a decline in sales of 14% compared to the same period the previous year. This can be attributed to several factors, including the slowdown in the Chinese market, a decrease in consumer purchases of high-end products in Europe and the United States, and global economic conditions and inflation.
However, Kering remains committed to its roadmap and is focused on revitalizing the Gucci brand. The appointment of new creative director, Sabato De Sarno, has already brought about some changes within the brand. The recent catwalk show, titled “Ancora,” showcased a new creative direction for Gucci while still paying homage to its past. The show received mixed reactions, with some praising the brand’s return to a simpler aesthetic and others criticizing the minimalist approach. The success of Gucci’s rebranding and new identity will be determined in early 2024 when the collection arrives in stores.
Kering is taking steps to strengthen Gucci’s position in the market. The company plans to invest more in targeted advertising campaigns, focusing on iconic handbag models such as the Bamboo, the Horsebit, and the Jackie. Gucci also aims to improve its communications strategy by launching seasonal campaigns, highlighting specific product categories, and collaborating with celebrities. The goal is to showcase Gucci as a brand that offers both fashion-forward designs and luxurious shopping experiences.
With the departure of former CEO Marco Bizzarri, Jean-François Palus has taken the helm of Kering and outlined four priorities for Gucci’s future success. These priorities include reaffirming the brand’s unique positioning to make it more desirable, improving production efficiency in the supply chain and distribution, and executing the overall strategy effectively. While the search for a new CEO is not currently a priority, Gucci will be hiring new employees to strengthen its team and support the brand’s relaunch.
In terms of distribution, Gucci is close to completing its wholesale network rationalization and expects to maintain stable sales in the coming year. The brand also plans to reduce its presence in outlets in the future. As for its retail network, Gucci does not anticipate significant expansion but will focus on strategic relocations, such as its flagship store in Paris moving near Place Vendôme.
Despite the challenges and disappointing results, Kering maintains its belief in the long-term potential of Gucci. The company is dedicated to executing its strategy and rebuilding the brand’s foundation under the leadership of Jean-François Palus. While uncertainties remain, Kering is optimistic that Gucci will regain its momentum and continue to drive the group’s revenues.
Useful links:
1. Business of Fashion: Kering says Gucci’s Momentum to Return after Reboot
2. Reuters: Kering Embarks on New Chapter Without Gucci Chief, Fashion Icon
