Luxury editor Robert Williams joins the discussion with insight into Gucci's alarming 24% sales decline and its implications for Kering. He delves into the brand's muddled identity, cautioning against leaning too heavily on heritage. The conversation highlights the challenges of finding a new creative director and contrasts Kering's strategy with that of LVMH. Williams emphasizes the need for a fresh vision to reinvigorate Gucci in a competitive market, questioning the brand's future and its position within Kering's luxury portfolio.
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insights INSIGHT
Gucci's Importance to Kering
Gucci is Kering's core brand and profit center.
Kering's performance is tied to Gucci's volatile boom-and-bust cycle.
insights INSIGHT
Gucci's Downturn
Gucci's recent downturn is severe, with sales dropping significantly.
The downturn's severity is uncertain due to pre-existing weaknesses in Gucci's business model.
question_answer ANECDOTE
Sabato De Sarno's Collection
Sabato De Sarno's Gucci debut reset the brand with a youthful, sexy image.
Despite initial freshness, the collection lacked urgency and broad appeal, failing to set the fashion agenda.
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Gucci has long been the shining star of Kering’s luxury portfolio, but the brand's recent struggles have exposed weaknesses in the conglomerate’s position. Gucci’s sales plummeted 24 percent in the fourth quarter of 2024, dragging Kering’s overall performance down by 12 percent. The shock departure of Creative Director Sabato De Sarno after less than two years only deepens the group’s instability.
Luxury editor Robert Williams joins executive editor Brian Baskin and senior correspondent Sheena Butler-Young to discuss how Gucci’s downturn is affecting Kering’s broader portfolio, why its attempt at a creative reset didn’t resonate, and what’s next for the group as it searches for a new vision.
Key Insights:
Gucci's downturn has been severe, with sales falling by almost a quarter in 2024. This dramatic slide highlights the challenge of reinvigorating the brand. “[Gucci] has had a few really big booms, but then also some pretty big busts afterward. That creates additional complications for the group and how much they're able to invest in acquiring new brands, in developing the brands they have. And honestly, to also just continue to exist,” says Williams.
Gucci’s identity has become muddled as it leans too heavily on its heritage, potentially limiting its appeal. “Gucci can stand for a lot of things and I think that's where they got a bit confused. It's the biggest Italian luxury brand and maybe they started to think that it was more of a heritage house than it should be,” Williams explains.
Williams outlines a protective strategy where the group is preemptively selling off valuable real estate. He cites the sale of luxury jewellery house Boucheron headquarters and flagship store on Place Vendôme, stating, "choosing to cash in on the fact that this building is worth a lot of money is a bit worrying that they feel the need to get that treasury right now."
Gucci’s potential for a rapid rebound hinges on securing the right creative leadership to tell a compelling story of the brand and leveraging its extensive assets. “I think real potential for the rebound is there if they can get the right person in place just to tell a very convincing fashion story. It can go very high, very fast again,” Williams says. “They have a lot of real estate, they have a lot of stores in great locations and they have a whole supply chain behind them that's really like rooting for their comeback because it's the biggest client for so many suppliers in the Italian fashion system.”
The Business of Fashion Podcast