Kering, the parent company of Italian luxury brand Gucci, has announced that CEO Patrizio di Marco will depart on January 1 after six years at the helm, while creative director Frida Giannini, di Marco’s wife, will end her 12-year stint with the company in February.
Di Marco will be replaced by Marco Bizzarri, current CEO of Kering’s luxury division, who formerly headed up Kering-owned brand Bottega Veneta. The company has not yet revealed who will replace Giannini.
Giannini was Gucci’s only creative director for nearly a decade
Gucci, which accounts for 50 percent of Kering’s revenues, has been suffering from a slump in sales; they dropped €851m in the third quarter of 2014, marking a fall of 1.9 percent (above a 0.5 percent forecast by analysts). That followed a second quarter sales tumble of 2.4 percent, the Guardian reports.
François-Henri Pinault, Chairman and CEO of Kering, praised di Marco for his work at the helm of the brand, which saw strong sales growth and high levels of profitability under his leadership. “The great performances achieved by the Gucci brand during his tenure stand as a testament to his success”, said Pinault. “His strategic vision, passion, dedication and charisma were key to bring Gucci where it is today.”
Giannini was Gucci’s only creative director for nearly a decade. “This is a remarkable accomplishment,” Pinault said.
The announcement marks the latest management reshuffle in the luxury goods industry – in October Kering-owned brands Christopher Kane, Brioni and Bottega Veneta all announced new CEOs.
That’s being driven in part by falling sales across the sector; Prada saw a 44 percent drop in profit in the three months to September 30, as it felt the effects of a slump in Asian sales following protests in Hong Kong. “The luxury goods market is undergoing a certain readjustment, the extent and nature of which is not entirely clear yet,” the brand said in a statement.
The general decline in the luxury market is being driven by a slow-down in the Chinese market – formerly the industry’s biggest driver – following a corruption clampdown in the country. It’s also a result of consumers flocking to less well-known labels and online stores; internet sales are growing at four times the rate of the luxury market, according to Solca.
As larger companies seek to bolster their offerings, M&As are becoming more common. In 2013 Kering acquired Milan-based jewellery brand Pomellato, while LVMH purchased a stake in Italian designer Marco di Vincenzo.
Despite the challenging climate, Luca Solca, analyst at Exane BNP Paribas, believes there’s still hope for Gucci. “Gucci is one the most prominent luxury mega-brands,” he said in a report by WWD. “It will benefit from new ideas and fresh energy. The key to stay relevant in luxury goods is continuing reinvention.”