When Frida Giannini presents her last catwalk collection for Italian mega brand Gucci in February she will be bowing out from a 12-year career that has seen the group become synonymous with brash and bling.
Ms Giannini joined the Florence-based designer in 2002 and has overseen the rise of the Gucci double G logo adorning the handbags and belts of the global wealthy. But most recently as creative director she has been furiously attempting to reverse the decline in sales growth with chief executive and husband Patrizio di Marco, as consumers now demand something more subtle.
For owner Kering, time has run out and its chairman and chief executive François-Henri Pinault has decided fresh faces are needed.
As luxury analyst Luca Solca says: “Managers go, and brands remain.” And Mr Pinault announced yesterday he had chosen Marco Bizzarri, currently its head of Kering’s luxury division, to replace Mr di Marco. The industry knew it was only a matter of time before the power couple departed the near 100-year-old brand.
Mr Solca, luxury expert at BNP Paribas, explains: “This was a change that was for a long time in the making. Mr Di Marco and Ms Giannini have presided over Gucci for a whole era, taking it to new heights.”
The brand reported that sales fell nearly 2 per cent in the quarter to the end of September and is under pressure to improve its image as shoppers move away from brash brands to subtler products.
Earlier this year, the group laid out plans to raise prices and slash the number of wholesale accounts to tighten control on where and how the brand is sold. Prices of Gucci handbags were raised by 30 per cent as Kering wants it to become more exclusive amid fears some of its products have become ubiquitous. The burgeoning Chinese and Asian consumers are a particular focus. After a desire to buy the most obvious and emblem-heavy items, China’s newly wealthy are becoming more sophisticated and want more refined labels.
HSBC analyst Erwan Rambourg and author of The Bling Dynasty: Why the Reign of Chinese Luxury Shoppers Has Only Just Begun, explains: “It’s what I call the French paradox. If you are a niche brand, everyone wants you. If you are a big brand, then by selling more you compromise a sense of exclusivity and the notion of luxury itself.” This is exactly Gucci’s problem. Its sales are of course incredibly impressive and it is Kering’s biggest brand but it is a victim of its success.
Mr Di Marco himself is aware of the change in consumer tastes. He worked at Kering for more than 13 years and was first chief executive of its Bottega Veneta label. Bottega has been one of the beneficiaries of the shift to more low-key brands with its non-logo designs.
Kering acknowledged Mr Di Marco’s work in its statement about his departure, saying: “He brilliantly relaunched the brand, building one of the most impressive success stories of the decade in the industry and laying down the foundation for the strong momentum that Bottega Veneta still enjoys today.”
He also made a start at moving Gucci on in his six-year tenure at the brand and Kering admits that as a result of his strategy “profitability of the Gucci brand reached very high levels, making Gucci one of the best performing brands in the luxury industry.”
Mr Bizzarri, who takes the helm in January, is also a Kering stalwart and a key confidante of Mr Pinault. The former Accenture strategy consultant joined the group in 2005 to run Stella McCartney and moved to Bottega Veneta in 2009. Mr Bizzarri has been a major beneficiary of Mr Pinault’s shake-up of the Paris-based sports to luxury group and was appointed chief executive of its luxury division in April – in charge of a stellar line-up of labels, including Saint Laurent, Alexander McQueen, Balenciaga and Christopher Kane. He is also on its executive committee.
The big job for Mr Bizzarri is now finding a replacement for Ms Giannini as Gucci’s creative director. He has the luxury of being able to raid Kering’s talent cupboard, but the aesthetics of the new Gucci must match the tastes of the world’s wealthiest and most fickle consumers.
Blowing the Budget: Why luxury goods matter
As the winter chill sends hoards of us off to buy new winter coats and boots, most will make do with high-street fare. But an increasing number are snapping up items including an exquisitely made £1,000 goose down jacket from French-Italian luxury brand Moncler, a £2,395 Burberry double cashmere Chesterfield coat with velvet collar or an £125 cashmere scarf from Brora.
The luxury sector – from handbags and perfume, to cars and watches – may be seen as the realm of the super-wealthy but the industry helps boost the economy.
The latest survey by the European Cultural and Creative Industries Alliance reports that the value of luxury goods and services grew by nearly 28 per cent between 2010 and 2013 and has created close to 200,000 jobs across the region.
While the pre-eminence of expertise from France, Switzerland and Italy in creating the finest products cannot be ignored, the UK is also making its mark. Michelle Emmerson, chief executive of UK luxury industry body Walpole, says: “The British luxury industry has grown faster than the UK economy over the past decade.”
Chanel and Hermes use Scottish cashmere from the likes of Johnstons of Elgin, while Chanel bought Scottish knitwear brand Barrie and has launched the company as a fashion brand in its own right in Paris and London.
According to Walpole and Ledbury, the UK luxury market was worth £6.6bn in 2012, predicted to rise to £12.2bn by 2017.Reuse content