Personal Vision, Business Opportunity at Gucci Crossroads – WWD

milan – The news of Alessandro Michele’s sudden departure from Gucci has been settled – and his parting thoughts are telling.

In a statement issued last Wednesday night, Michel thanked Gucci and the company’s team, emphasizing his “sincere wishes [for them is to] Continue to cultivate your dreams, the subtle and intangible substances that make life worthwhile. May you continue to nourish yourself with poetic and inclusive imagery, staying true to your values. May you always live in your passion, driven by the winds of freedom. “

In fact, as WWD first reported a day ago, sources believe Michele will leave the company to stay true to his values ​​after being asked to “initiate a strong design shift” to revive Gucci’s phenomenal growth. However, he did not agree to change his mind about the brand.

Giovanna Brambilla, partner at Milan-based executive search firm Value Search, said Michele’s “precise and consistent aesthetic codes helped turn Gucci around, and they were perceived as authentic by the market and by a younger generation with a sixth sense”. “There’s no contradiction between his values, his products, and how Gucci communicates. The brand’s community finds his narrative consistent, and the touchpoints he focuses on—inclusivity, gender fluidity, sustainability, the metaverse— The hype was generated but it was believed to be real, and he had the support of management. Michele probably felt he didn’t want to betray the trust the community had placed in him, and it made sense to end the venture with Gucci.”

A Milan-based luxury consultant, who asked not to be named, believes the 2019 departure of former Gucci executive vice-president and Valentino CEO Jacopo Venturini may have been triggered by his own efforts to downplay Michele’s conceptual designs and focus on luxury, as opposed to design. teacher in stark contrast.

“The irony is that if the client doesn’t really understand how to enter the designer’s dream world and imagined world, but is attracted and excited by all the hype surrounding the brand, there are more content that is less complex but more visually stunning. Commercial projects will be hot tickets, says the consultant. “At Gucci, there is a disconnect between the market and Alessandro’s smart concept of the brand. I think Gucci is reevaluating its positioning right now.After all, François-Henri Pinault [chairman and CEO of Gucci’s parent Kering]saw fruition, for example, at Bottega Veneta, where new creativity was infused [by creative director Matthieu Blazy] Continues to deliver results for the brand – albeit at a price. So he must be thinking, why not at Gucci? “

Another source told WWD that Pinault is considering changing the pace at the group’s star brands and “trying to revive the ultra-luxury consumer.” That’s exactly the strategy the luxury giant is said to want at Bottega Veneta. Despite the huge success of creative director Daniel Lee’s trendsetting products, the brand has lost some of its luxury appeal, which contributed to Lee’s sudden departure.

Kering reported last month that while organic sales accelerated in the third quarter, its cash cow Gucci still underperformed the group’s other brands. Italian brands’ revenues totaled €2.6 billion, up 9 percent year-on-year, following a 4 percent rise in the second quarter.

That was slightly below analysts’ consensus forecast, which called for a 10 percent rise in Gucci’s comparable sales. In contrast, organic sales at LVMH Moët Hennessy Louis Vuitton’s main fashion and leather goods division, which includes Louis Vuitton, Dior, Loewe and others, rose 22% year-on-year in the third quarter.

Gucci faced a very harsh basis of comparison in the fourth quarter, as sales rose 32% year-over-year last year.

“Gucci is a huge company, responsible for a huge pipeline, employs thousands of employees, and has major projects including philanthropic and sustainability initiatives, and any slowdown in sales is expected to hinder these projects. Therefore, making These decisions were made to propel them forward, not just to avoid disappointing investors and analysts,” said Alessandro Maria Ferreri, CEO and owner of The Style Gate consultancy. Maria Ferreri argues.

Gucci also has an extensive global retail network, and stores must carry a variety of products, Ferreri continued, believing that Michele’s genderless designs sparked numerous imitations and sparked a powerful trend after he took office in January 2015, ultimately undermining the brand’s reputation. Influencing the men’s clothing business, the store is vacant.

“If you don’t feel the need to design [traditional men’s looks] They’re useless to you, but not to a very high-end clientele,” Ferreri argues. “Think about what Louis Vuitton has done with menswear, it’s another world for womenswear. In fact, few brands have the same designer in both categories, and Gucci does a better job in menswear. Who knows, maybe they want to hire a dedicated menswear designer and Alessandro won’t hear about it? “

Michel’s exit, by the way, comes before Gucci’s return to Milan Men’s Fashion Week, where the designer has experimented with different show formats and timings over the past few seasons to his liking.

Hours before Kering confirmed Michele was leaving Gucci, analysts at Exane BNP Paribas said in a note that the designer’s reinvention “triggered a period of hypergrowth that will be remembered in the industry (luxury People in the industry are discussing brand turnover).”

Michele was reportedly asked to offer timeless and less fashionable products, the report continued, but back in July, the bank’s analysts wrote, “In luxury, consumers decide which new products become timeless and less fashionable.” Not the design team” and “deemphasizing Gucci’s fashion angle would jeopardize one of the most unique elements of its DNA.”

The report states that there are “more opportunities than risks” in designer changes and that “the external candidate for the job is not obvious. Alessandro Michele was a successful internal promotion, Kering Probably want to avoid a situation where Gucci relies too much on ‘star designers’.”

Sources reportedly mentioned the names of in-house designers Remo Macco and Davide Renne as potential candidates to succeed Michele, but for now Gucci says the company’s design office “will continue to lead the way forward until a new creative organization is announced. The name of Marco Maria Lombardi, a member of the Gucci design studio, was also mentioned by WWD.

Analysts at Jefferies highlighted that Gucci has a strong track record of “rebranding,” citing Michele’s previous Tom Ford. They describe this as “more than just the exit of one of the most iconic designers of the past decade,” and stress that they believe the move “underscores that Kering may choose to rethink more deeply its biggest but also underperforming The best brand. No clear path of change has been announced, nor is it known whether a deeper shakeup will take place.”

In fact, sources in Milan also wondered whether president and CEO Marco Bizzarri could take the top job at Kering and be succeeded by Saint Laurent CEO Francesca Bellettini. Incidentally, executives of the latter reportedly appeared at Bain & Company. The Altagamma conference in Milan earlier this month – a first for Bellettini, who has not attended any event here in recent memory.

“There’s no getting around the fact that while Michelle’s tenure between her landmark fall debut in 2015 and the onset of the pandemic was as influential and important as Tom Ford’s tenure after Investcorp [Gucci’s onetime owner], Gucci as a brand has indeed since then fallen significantly below its main peers and is about to change,” Jefferies continued. The report adds that “the elements that changed Gucci during the first few years of Michele’s tenure no longer worked, This product has become a major issue. “

The report notes that Bizzarri and Michele tripled the size of Gucci, “so the next step is bound to be more complex (internal vs. external replacement? Division split? More management changes?), especially at a time when demand is more volatile The ‘ambitious’ targets marked at the most recent Capital Markets Day are looking increasingly out of reach.” The brand’s top-tier supply chain, “excellent digital know-how”, client engagement skills and strong management have helped convince investors On Gucci’s “ability to implement change, not necessarily timing. We await further news,” Jeffries said.

It’s unclear what the future holds for Michele, who has expressed his passion for cinematography — like Ford — but one source speculates that the designer “may be getting a job from Pinault soon.” A call from chief rival Bernard Arnault.”

The shift in Gucci’s chief creative role comes as many of Italy’s storied houses, from Ferragamo and Bally to Missoni, unveil the first spring designs of a new creative director. Speculation is rife that Donatella Versace is renegotiating her contract with Versace’s parent company, Capri Holdings Ltd., but Riccardo Tisci, who left Burberry in September, may again be considered to replace her. Tisci was reported to have gone to Versace in 2017, but the match fell through due to disagreements between the two designers. At the time, however, the majority of Versace’s shares were still owned by the namesake family.

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