Gucci is looking for a new top designer
2022.11.25 00:31
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Gucci is looking for a new top designer
Budrigannews.com – Alessandro Michele, the flamboyant designer who was a favorite of Harry Styles and Lady Gaga, abruptly left Gucci, which puts more pressure on owner Kering (EPA:).as the Italian fashion house’s revenue growth slows.
Kering is trying to revitalize the label, which accounted for two thirds of the parent company’s profits last year, and ahead of the lucrative holiday shopping season when the creative director’s departure after seven years is announced.
Sources told Reuters that the designer and the management of the company had been at odds a lot.
“Different perspectives each of us may have,” Michele said when he announced his departure on Wednesday.
François-Henri Pinault, chairman and CEO of Kering, called the designer’s time there “an outstanding moment” in Gucci’s history.He didn’t say who would take over.
According to analysts, Michele’s departure created a void that the label must quickly fill.
In a research note published on Thursday, JP Morgan analyst Chiara Battistini stated, “This raises a few question marks in our view on the execution and evolution of the brand in the coming months, leaving further uncertainty around the timing of the acceleration of the brand’s momentum.”
Analysts at Jefferies said that Michele’s departure is “more than just the exit of one of the most iconic designers of the last decade.” They also said that Kering might “deeper rethink” the label.
They added, “The next step is necessarily more complicated now.”
Over the past few years, Kering’s shares, worth more than 66 billion euros, have lagged behind rivals.This year, they have lost a quarter of their value.
Graphic:FURRY LOAFERS shares Gucci’s decline in popularity. Michele, 49, resurrected the brand with his eccentric, gender-fluid designs, which were well-liked by younger customers.
The Dionysus handbag, with a chain strap and double tiger heads, started at around $900 for mini sizes, and the fur-lined loafers, embellished with the label’s signature horse bit, were early hits.
After being promoted from designing accessories in 2015, he contributed to the growth of profits, which increased by fourfold by 2019 as revenue increased to nearly 10 billion euros from less than 4 billion.
As of late, development has eased back while rivals like Dior and Louis Vuitton, claimed by rival extravagance bunch LVMH, have shot ahead.
Gucci sales increased by 9% in the third quarter, which was lower than what the market had anticipated and was attributed by some analysts to a waning interest in the designer’s designs. Sales at LVMH’s fashion and leather goods division increased by 22%.
They have questioned the June-set mid-term goal of 15 billion euros in annual sales.
Additionally, the brand has experienced COVID-19 lockdowns in China, where it has a larger store network and greater exposure than other heavyweights.
China produces around 35% of Gucci’s yearly deals, as per Barclays (LON:)estimates, compared to 27% for Hermes and 26% for LVMH’s fashion and leather goods division.
Time is not on the side of the iconic label’s MOVE QUICKLY.
“It could take around a year to see the results of any aesthetic shift,” UBS stated, citing design and production lead times. Although making such a radical change is beneficial,
According to industry insiders, there is a large pool of potential creative directors, including well-known designers and relatively unknowns who could be recruited internally in the same way Michele was.
According to Serge Carreira, head of emerging brands at the French fashion federation FHCM, a new director could give the brand a completely new direction with a “tabula rasa” approach, as Demna Gvasalia did at Balenciaga, or build on the direction of a previous designer, like Anthony Vaccarello, who followed Hedi Slimane at Saint Laurent.
He added, “You could also maintain the status quo for a while and take a break for about a year.”Following the death of designer Virgil Abloh last year, the current team could continue creating collections, just like the men’s team at Louis Vuitton did.
Yet, given the strength of Michele’s tasteful and brand character, an adjustment of situating could mean all the more a “upset than a development”, said JP Morgan’s Battistini.
According to Battistini, “This, in our view, could mean a period of relative disruption, both operationally and financially,” which could further delay the re-rating story of Kering for the time being.
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