No quick fix for Gucci as investors cheer new look management

Shares rose more than 6% at announcement of new CEO and head of brand development

Gucci chief Marco Bizzarri is to leave in September, parent group Kering has said.

Kering shares rose more than 6% as investors cheered news of a major management reshuffle at the luxury group, aimed at reviving sales at star label Gucci.

Gucci has lagged rivals Louis Vuitton, or LVMH, and Hermes in recent years, struggling to keep pace with their rebound from the impact of the pandemic.

Kering has announced that Marco Bizzarri, who had led Gucci since 2015, will leave the company in September. It named managing director Jean-Francois Palus — the right hand man of Kering billionaire boss Francois-Henri Pinault — as Gucci's new CEO and president for a transitional period.

Rising star Francesca Bellettini, who has run fast-growing fashion label Yves Saint Laurent since 2013, has been named Kering's deputy chief in charge of brand development, while group finance chief Jean-Marc Duplaix has been appointed as Kering deputy CEO in charge of operations and finance.

The moves are part of an attempt to steer a new course for Gucci, which accounts for half of Kering's sales and almost two-thirds of its operating profit.

Changes positive

Analysts said the changes were positive, though most did not expect any turnaround to bear fruit soon.

"The change of CEO at Gucci risks further prolonging the current transition phase of the brand, though it also shows the commitment of the group to go for a more decisive and effective relaunch, tightening the grip on the brand," analysts at Akros said.

Between 2015 and 2019 Gucci became one of the world's fastest growing brands, doubling sales to just under €10bn under the leadership of Mr Bizzarri and designer Alessandro Michele, whose gender-fluid and eccentric style were a huge hit with young shoppers in China. But since then, growth has been tapering off, just as LVMH's Louis Vuitton gained market share thanks also to hefty marketing spending.

After Mr Michele left Gucci in November, rumours had been circulating on Mr Bizzarri's fate, since the pair had worked hand-in-hand for years. The challenge for Gucci now is not to lose any further ground. 

Mr Michele's successor, Sabato De Sarno, previously fashion director of men's and women's collections at Valentino, will show his first collection for Gucci in September — meaning his designs will not hit the stores before late 2023. 

• Reuters