French luxury group Kering has been hampered by Gucci’s underperformance in 2024, and is pinning its hopes on its flagship label’s turnaround to steady its course this year. According to Kering’s top executives, in the past two years Gucci has undergone a drastic efficiency therapy, and has consolidated its fundamentals by putting its rich heritage centre-stage, for example launching revamped versions of some of its signature handbag models, like the Blondie, Jackie and Bamboo. The arrival of a new creative director is expected to inject the directional vibe and desirability that Gucci is currently lacking.

Gucci accounts for almost half of the Kering group’s revenue, and two-thirds of its operating income. However, its sales have been plummeting of late, slumping further throughout 2024. The Italian luxury label ended the year with a 23% revenue shortfall (and a 21% one on a comparable basis), down to €7.65 billion.

Gucci has recently been working on the quality of its articles, and on different product lines with complementary strategies. For example, it introduced entry-level products to attract a more extensive clientèle and capture new customers, while still focusing on its more upmarket collections. “There is no question of abandoning the aspirational customer segment. It’s one of the key segments for our positioning. We intend to remain very relevant, very strong in this segment, while adding a more upmarket niche in what we call our brands’ elevation strategy,” said Kering CEO François-Henri Pinault.

On February 6, Gucci dismissed Sabato De Sarno, who was in charge of style for just three seasons. De Sarno had succeeded the iconic Alessandro Michele, and was presented at the time as the embodiment of a new chapter for Gucci, associated with a repositioning towards the highest end of the market and a more minimalist aesthetic, more in tune with the Florentine label’s heritage. “Alessandro’s style was downright maximalist, while Sabato De Sarno’s aesthetic approach was less extravagant, less maximalist, but it allowed us to do exactly what we wanted,” said Francesca Bellettini, Kering’s deputy CEO in charge of brand development.
 
During the conference with analysts held after the publication of Kering’s annual results, Bellettini explained how Gucci cemented its position during this period by drawing on its fundamentals, notably leather accessories – like its iconic handbags and classic moccasins model, which have been re-introduced in new versions – whose performances in the fourth quarter were “very encouraging.” In a way, Gucci’s post-Alessandro Michele relaunch does require a first phase in which the slate is wiped clean, reconnecting the label’s style with its historical identity, before triggering a second phase underpinned by the appeal of a more directional aesthetic.

In other words, upending everything with the arrival of a new creative director isn’t on the cards. Bellettini made it crystal clear: “We are not entering a new transition phase, we won’t slow down the label’s turnaround. We’re moving forward according to plan.” Bellettini denied that hiring De Sarno was a mistake, saying that the last 18 months allowed Gucci to reconnect with its history and traditions, elements that “have never been so strong,” as she put it. “We have focused on the brand’s heritage and tried to elevate our products, to make them consistent with Gucci’s heritage, while adapting them to the present times. There is no doubt that the basis on which we’re now operating is much more solid than it was 18 months or two years ago,” said Bellettini.

But this is only one of the label’s twin facets. The other being creativity. This new phase in Gucci’s relaunch is “the perfect time to inject creativity, directionality and desirability, elements that Gucci needs to recreate the unique dichotomy that characterises the brand, in which tradition and fashion must always go hand in hand,” said Bellettini, adding how “over the past 18 months, we have focused a little more on tradition by improving product quality. It’s the ideal foundation to now introduce creativity and fashion, while continuing to preserve what has been done in recent months.”

This foundation rebuilding phase has also been accompanied by an in-depth managerial reorganisation at group level, noted Pinault. “In this first phase, my priority for the group has been to develop its labels using a self-contained approach, putting in place for each of them the right managing director and the right creative director, while building the right distribution network. We have now started to expand the brand’s customer base, which requires a much more nuanced approach, with a greater emphasis on retail expertise, etc.”

Stefano Cantino has therefore been promoted to the role of Gucci CEO, assuming his post at the start of 2025. The name of Gucci’s new creative director remains unknown, but ought to be revealed soon. As Bernstein analyst Luca Solca cheekily suggested, it might be Hedi Slimane, “who is renowned for his pared-down designs, much like Tom Ford was when he worked at Gucci, and was so successful at the turn of the century.” Indeed, Slimane’s name is the most frequently mentioned in conjunction with Gucci’s job. But, with Kering’s back against the wall in terms of its flagship label’s appeal, for the group as a whole Gucci’s relaunch will have to work out just right.