(Reuters): Friday in Milan marks the high-stakes designer debut of Gucci creative director Sabato De Sarno for the Italian label’s owner, French luxury firm Kering (PRTP.PA).
De Sarno’s Gucci catwalk presentation, one of the most anticipated shows in the business this year, is both the first significant test of a comprehensive change at Kering and will act as the brand’s aesthetic reset with the goal of reviving sales.
The group’s top management has undergone significant upheaval as a result of efforts to revive the label, which generates the majority of Kering’s revenues and profits.
In order to diversify its revenue streams, the business also announced plans to purchase high-end perfume brand Creed in June and a 30% investment in fashion house Valentino in July.
Even though Kering’s star label was one of the biggest success stories in fashion in recent years, it was unable to benefit from the post-pandemic recovery that drove booming sales at competitors like LVMH-owned Louis Vuitton and Dior.
In order to manage the brand as the business looks for a more long-term replacement for chief executive Marco Bizzarri, who departs after De Sarno’s debut presentation on Friday, group managing director Jean-Francois Palus has taken over.
Bizzarri and the company’s former creative director Alessandro Michele were hailed with the brand’s meteoric success, increasing sales to roughly 10 billion euros between 2015 and 2019. However, they fell behind competitors that made significant marketing investments during the epidemic.
Before De Sarno made his debut, Gucci executives concentrated on classic looks and more expensive products, exhibiting them in boutiques that catered to the ultra-rich. They also increased marketing and the quantity of collections.
“We believe the quiet progress being made on product, price, and merchandising sets the right foundation for Sabato De Sarno’s new chapter at the brand,” analysts at RBC stated, pointing to corporate initiatives to lower the label’s entry price offer while launching new products at higher prices.
According to analysts, Kering may need to increase its investments to catch up to rivals like LVMH and Hermes, which could cause margin estimates to change.
We don’t believe that the market would react negatively to a margin reset, according to Carole Madjo, a Barclays analyst.
De Sarno’s new design aesthetic will be crucial to rekindling brand excitement, not just for luring customers into boutiques but also because it may be used as a model for store renovations.
Daria Werbowy, a model who withdrew from the fashion industry after dominating the catwalk in the early 2000s, is shown in the designer’s first significant advertising campaign for Gucci, which was made public in August. Werbowy is dressed in a sleek bathing suit and heavy, gold “Marina Chain” jewelry.
The Impression, a trade newspaper for the fashion industry, noted that the brand’s autumn ad campaign kept to a “recognizable Gucci aesthetic” while not “too much in any one direction,” despite the fact that it recently deleted all of the content from its Instagram account.
According to Luca Solca, analyst of Bernstein, “it becomes now very important that the new Gucci team will score some goals and win some matches, to give investors confidence that we are indeed on the right path.”
