On October 9, 2024, Gucci’s parent company, Kering, announced in a statement that Stefano Cantino would replace Jean-François Palus as the CEO of Gucci. Stefano Cantino joined Gucci as Deputy CEO in May 2024, after spending five years at Louis Vuitton, where he was responsible for brand communication and image management. Prior to his time at Louis Vuitton, Cantino worked for Prada Group for 20 years, ultimately serving as the Director of Communication and Marketing.
It’s noteworthy that this change comes just one year after the last leadership switch. In July 2023, Kering announced that Gucci’s CEO Marco Bizzarri would step down in September, with the group’s Managing Director Jean-François Palus temporarily taking over.
Over the past two years, Gucci has experienced significant leadership changes. In early 2023, the brand appointed Sabato De Sarno as its new Creative Director, with his debut collection showcased at Milan Fashion Week in September of the same year. On April 30, 2023, Robert Triefus, Gucci’s Executive Vice President for Corporate and Brand Strategy, as well as CEO of Gucci Vault and Metaverse Ventures, left the company. In early September of this year, Gucci hired Davide Buzzoni as the Global Director of Communication.
However, the frequent leadership changes have not translated into notable performance improvements. In the context of a slowing luxury market, Kering’s challenges have become more pronounced. In the first half of 2024, Kering’s revenue fell by 11% to €9 billion, with net income attributable to the group dropping by 51% to €878 million. Notably, Gucci, which accounts for half of Kering’s revenue, experienced the largest decline, with revenue down by 20% to €4.09 billion. Kering expects that for the second half of the year, recurring operating profit may decline by approximately 30% year-over-year.
On the design front, Gucci has recently recruited several designers from luxury brands such as YSL Company, Dior, and Valentino. Citigroup analyst Thomas Chauvet noted that with increased marketing efforts and leadership changes, Gucci’s performance could see improvement this year, though the pace of transformation remains slower than expected.
Kering’s financial report indicated that due to the poor sales of previously popular styles, management is pinning its hopes on a new handbag line launched in September, alongside a ready-to-wear collection by Sabato De Sarno. Gucci is also planning to enhance its existing channels while scaling back its outlet store presence.
Handbags and footwear sold in Gucci’s mainline stores are often found in outlet locations, with even popular styles like Gucci Dionysus and 1955 bags available at outlets, sometimes at discounts of up to 50%. On social media, some consumers have voiced concerns that selling popular styles in outlets damages the brand’s value. Kering has recognized this risk; during the early stages of former Creative Director Alessandro Michele’s transformation efforts, the company announced plans to reduce discount activities and cut back on wholesale channels. After releasing the 2023 financial report, Kering stated that it would further decrease Gucci’s discounting and might start closing some outlet stores as early as 2024.
The leadership change did not receive a positive market response. Following the announcement of Gucci’s new CEO, Kering’s stock fell by 4%. The company’s market value is currently about €29.2 billion, a drop of approximately 60% from its peak.
Fashion industry expert Zhang Peiying believes that with the CEO change, Gucci’s brand communication, customer resources, and market channels may improve. There could also be adjustments in the brand’s strategic direction and product lineup, but it’s unlikely that performance will see a significant short-term boost. “Luxury brands don’t respond as quickly to market changes as mass-market brands do. The competition is fierce, alternatives are plentiful, and changing the overall brand tone isn’t instantaneous. Regardless of who is in charge, it’s challenging to alter a brand’s core DNA in the short term, and brand DNA significantly influences consumer decisions,” Zhang said.
Zhou Ting, Director of the Yaoke Research Institute, pointed out that the lack of brand image improvement and innovation is the main reason why Gucci’s performance hasn’t improved despite leadership changes. “The new CEO will play a role in determining whether Gucci pursues a high-end or mass-market strategy in the future. It’s clear that this new CEO, who comes from LV, will firmly adhere to a high-end strategy to revive Gucci’s brand image,” Zhou noted.
Zhou further emphasized that if the brand wants to genuinely enhance its image, controlling the pricing system is crucial, and outlets are a key factor in pricing policy. Reducing the outlet channel will help maintain the brand’s pricing structure.
Zhang Peiying also agreed that reducing the outlet presence is vital for reshaping the brand’s image. Maintaining brand tone and influence is a positive signal. “In the future, the brand should also focus on product innovation—not only in presenting brand elements but also in expanding brand power, which includes exploring emerging markets and enhancing digital marketing,” she added.