Top Gucci Executives Patrizio di Marco and Frida Giannini to Leave
PARIS - Frustrated by a protracted decline in sales at its Gucci flagship, the French luxury group Kering announced on Friday the departure of the brand's two top executives, as the storied Italian fashion house struggles to move into the digital age at a time of dizzying changes in consumer tastes and increasing competition from smaller brands.
Kering, whose stable of luxury brands also includes Balenciaga, Alexander McQueen and Yves Saint Laurent, said Gucci's chief executive, Patrizio di Marco, would step down in January. He is to be replaced by Marco Bizzarri, head of the group's luxury division and a former head of Bottega Veneta, another group brand, which has managed to maintain robust sales despite the recent global downturn.
Gucci's creative director, Frida Giannini, will quit the brand in February, following the presentation of Gucci's fall-winter women's wear collection, Kering said in a statement. Her replacement will be announced early next year, the company said.
The dual punch of corporate and creative changes, while widely expected, is the biggest shake-up at a luxury brand since Tom Ford and Domenico de Sole left Gucci in 2004. It caps off a year of changes in the luxury arm of Kering, the third-largest luxury group in the world after LVMH Moët Hennessy Louis Vuitton of France and Richemont of Switzerland.
The management shake-up at Gucci comes as sales at the 93-year-old brand - which accounts for nearly one-third of Kering's annual revenue - have failed to match the performance of the group's smaller labels in recent years. Luxury consumers, particularly in China, have turned away from Gucci's signature logo-emblazoned goods in favor of subtler fashion statements.
Gucci's sales in the first nine months of this year slumped by 3.5 percent from the same period in 2013, to 2.5 billion euros, or about $3.1 billion, Kering reported in October. That compared with a 12 percent sales growth at Bottega Veneta over the same period and a 26 percent growth at Yves Saint Laurent.
'Gucci is one the most prominent luxury megabrands. It will benefit from new ideas and fresh energy,' Luca Solca, a luxury analyst at Exane BNP Paribas in London, said in a note to clients. 'The key to stay relevant in luxury goods is continuing reinvention.'
In announcing the management changes, Kering's chairman, François-Henri Pinault, said he hoped they would inject 'new momentum' at Gucci and thanked Mr. di Marco and Ms. Giannini - who are also a couple and have a child together - for their contributions to the group.
Kering said Mr. Pinault would step in as interim chief of the group's luxury couture and leather goods division until a new executive could be appointed. But the company emphasized that the leadership transition at Gucci would not lead to any broader changes in the group's luxury activities.
Like its rival megabrands, including Louis Vuitton and Prada, Gucci has struggled to navigate rapidly shifting tides in consumer tastes and shopping habits as a younger and tech-savvy generation of luxury goods buyers has shifted the competitive dynamic, enabling less well-established labels to vie for attention alongside heritage-laden industry mainstays.
'The relationship of consumers towards luxury brands is changing,' said Claudia d'Arpizio, who specializes in luxury goods as a partner with Bain in Milan. 'It is also very individualistic. These people are not just looking for status symbols, the ability to show they are a connoisseur.'
Analysts have been tracking the impact of consumer logo fatigue on the big brands for several years. Gucci has tried to respond to this shift by increasing the share of high-end leather accessories in its product mix with more discreet branding. Over the past year, items without logos now represent about two-thirds of Gucci's revenue, compared with around 40 percent in 2012.
But the shift has so far failed to reverse a slump that has been exacerbated by cooling global economic growth, particularly in the emerging markets of Asia. In China - the center of a global luxury boom five years ago - a recent crackdown on conspicuous consumption by government officials has been felt at the cash registers of numerous fashion brands. Europe's prolonged economic crisis, along with recent Western sanctions against Russia, which have sharply reduced luxury spending by wealthy Russian tourists, have only deepened the malaise.
The high-profile changes in the executive ranks at Gucci represent are just the latest in a series of recent moves by European luxury goods makers as they scramble to remain relevant to younger consumers.
Last summer, Hermès announced the appointment of Nadège Vanhee-Cybulski - previously of the The Row, an edgy young brand founded by the celebrity twins Mary-Kate and Ashley Olsen - as its new creative director for women's wear, replacing Christophe Lemaire, who left the iconic French house after just four years to focus on building his own label.
Meanwhile, Kering and its larger rival, LVMH, have been snapping up emerging brands as well in a bid to offset lackluster sales at their flagship fashion and leather goods labels.
Last year, Kering took control of Pomellato, a trendy Italian jewelry group, as well as a minority stake in Altuzarra, the label started in 2008 by the French-American designer Joseph Altuzarra. LVMH bought a stake in Marco di Vincenzo, an up-and-coming Italian fashion house in February, and last year acquired the British shoe designer Nicholas Kirkwood.
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