Kering, the luxury group that owns Gucci, is implementing a new strategy to revive the brand’s performance after a disappointing first half of the year. The company aims to quickly restore Gucci’s profitability and reputation by making key appointments and initiating a comprehensive reorganization.
During a conference call to present the half-year results, Kering’s CEO, François-Henri Pinault, outlined the roadmap to revitalize Gucci. The brand’s poor performance negatively impacted the company’s net profit, which declined by 10% to €1.785 billion in the first six months of the year. Although sales increased by 2% to €10.13 billion, Gucci experienced a 1% decline in sales to €5.12 billion and a 4% decrease in profit from recurring operations to €1.81 billion.
To address these challenges, Kering has appointed a new creative director, Sabato de Sarno, and brought in Jean-François Palus as the head of the company. De Sarno, a relatively unknown designer with experience at fashion houses like Valentino, will work closely with the merchandising and communications teams to prepare for the upcoming show and the brand’s expansion. Palus, who is familiar with Gucci’s organization and has extensive experience within the Group, will take over as CEO following the fashion show to ensure a seamless transition.
Palus’s immediate priority is to restore Gucci’s performance and relaunch its aesthetic. The decision not to hire an external manager was intentional, as it would have taken too long for them to become familiar with the brand’s complex operations. Instead, Palus will collaborate with Francesca Bellettini, who has been promoted to Deputy CEO of Kering, to address all aspects of Gucci’s organization.
In order to regain growth, Gucci will need to develop a new image and aesthetic while maintaining its strategy of elevating the brand and focusing on exclusivity. The company plans to promote key products in the appropriate stores and utilize suitable imagery and marketing campaigns following the September show. The goal is for the new aesthetic to have an immediate impact across all product categories and customer touchpoints.
Looking ahead, Kering will begin the search for the right person to guide Gucci’s future growth in October. They are open to both internal and external candidates and prioritize finding someone who can lead the house for the next decade.
Despite the challenges, Pinault is confident in the strong team in place and believes that the appointments of de Sarno and Palus marks a new chapter for Gucci. The company is determined to regain momentum and position Gucci for long-term success.
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