Falling sales at Kering reveal motivation for creative direction change

Luxury conglomerate Kering has recorded revenue down 13% to €4.5 billion in the third quarter of 2023 revealing the reason why it has felt the need for a change of creative direction at the top of some of its flagship brands.

Its biggest brand Gucci was down 14% at €2.2 billion during the quarter placing more pressure on its new creative chief Sabato de Sarno, who was drafted in from Valentino to marshall in a new era of quiet luxury at the house after his predecessor Alessandro Michele's maximalism began to lose appeal with customers.

Sales in the directly operated retail network at Gucci fell 7% on a comparable basis during the quarter, with "resilient performances" in handbags and from the Valigeria travel collection. Wholesale revenue fell 17% on a comparable basis.

Gucci SS24 (Luca Bruno/AP)

De Sarno showed his first collection at Milan Fashion Week in September to mixed reviews. It was a refined vision which also hit a number of key trend points for SS24, including patent leather, slouchy denim and micro minis.

Many loved it, others (probably Michele fans) felt it was undercooked but, since it hasn't hit shops yet, it's too early to assess the impact it will have. There is no doubt though that Kering is banking on a wholesale change of direction and claims that "the management team is hard at work on the flawless execution of its strategy".

Yves Saint Laurent’s revenue in the third quarter of 2023 amounted to €768 million, down 16%, and remains under the creative direction of Anthony Vaccarello, who has led the house since 2016.

Vaccarello appears to remain in favour and directly operated retail sales were down 4%, in part due to strong comparisons. Wholesale was down 38% during the quarter. "The House achieved positive momentum in Women’s ready-to-wear and is pursuing its strategy aimed at elevating its offering," said Kering.

Bottega Veneta’s revenue totalled €381 million in the third quarter, down 13% as reported and down 7% on a comparable basis.

In the directly operated retail network, revenue fell slightly, down 2% on a comparable basis in the quarter. Wholesale revenue was down 30%. The company claims Matthieu Blazy's SS24 was well received and the brand is focused on enhancing its "exclusivity".

Seán McGirr

A change of guard was recently announced at Alexander McQueen whose results are not separated out at Kering and merely fall under "Other Houses". Briton Sarah Burton and former right-hand woman of the house founder, the late Lee Alexander McQueen, showed her final collection in Milan last month and her successor was revealed to be Irish designer Seán McGirr who has been appointed from JW Anderson.

While Burton's mastery at red carpet dressing and tailoring was never in doubt, sales at McQueen also slowed in the third quarter and it is understood that Kering is hopeful that McGirr can inject some youthful spirit and expand the brand's appeal beyond formal dressing.

Demna's Balenciaga, which also falls under "Other Houses", which overall was down 19% to €805 million in the third quarter, also experienced slowing.

Tailoring house Brioni was up along with jewellery brands Pomellato and Boucheron, proving that some categories remain resilient despite challenging global trading conditions.

Main image: Gucci SS24 (Luca Bruno/AP).