Last Updated on February 12, 2024 by Admin
Feb 12, 2024
Upon the release of its annual results, Kering revisited its new managerial structure, providing more clarity. Last summer, the French luxury group announced the departure of Marco Bizzarri, Gucci‘s CEO since 2015, and his replacement “for a transitional period” by Jean-François Palus, the company’s former deputy CEO and one of François-Henri Pinault‘s closest collaborators. Simultaneously, Francesca Bellettini, CEO of Saint Laurent, was promoted to deputy CEO of Kering, overseeing the development of the houses.
During the results presentation teleconference with analysts, Bellettini announced that no search was underway to recruit a CEO for Gucci. Jean-François Palus, initially slated to oversee the interim period until a new leader was found, will continue to lead the group’s flagship brand. Bellettini emphasized that the group is focused on assembling a robust team around Palus.
“This strategy has already commenced with the appointment of Massimo Vian on January 15,” as the director of industrial operations and supply chain, she specified, adding, “Together with Jean-François, we will assemble a highly capable team, to be joined in the coming months by additional talent.”
Kering’s chairman and CEO, François-Henri Pinault, underscored the point, explaining that the term “interim” was initially used as a precautionary measure. Last July, “the aim was to assess Gucci’s leadership and organizational situation clearly, to determine the best solution for the brand. (…) The top priority was to establish a strong management team, and Jean-François has proven to be an excellent leader for this task. Consequently, I decided in the fall to confirm him as CEO to establish a robust organization. (…) We are highly satisfied with Gucci’s initial months. Jean-François is leading the company and is doing an outstanding job of reorganizing, building teams, and setting priorities and roadmaps for the coming months and years,” he stated.
This approach also aims to reassure the markets, averting any sense of uncertainty around the current team, particularly at a time when the economic climate isn’t favoring Kering. As a reminder, the group saw its revenue decline by 4% (-2% on a comparable basis) in 2023, to €19.56 billion, with operating profit plummeting by 15% to €4.74 billion. The company’s primary focus is on revitalizing Gucci, which accounts for half of its total sales and two-thirds of its profits.
However, its strategy to elevate the brand into the very high-end segment, initiated with the streamlining of sales channels and the appointment of Sabato De Sarno as creative director, may take time to yield results. After a stable year in 2022 (+1% on a comparable basis), Gucci concluded 2023 with a 2% decline on a comparable basis (-6% on reported data), totaling €9.87 billion, while profits fell by 13% to €3.26 billion. And the decline is expected to continue into 2024, cautioned the group’s executives.
For her part, Francesca Bellettini, who retained the helm of Saint Laurent, elaborated on the implications of her dual role and how it brings a fresh perspective to the group. As deputy CEO of the group, “I am not the CEO of the other brands, but I collaborate with the CEOs and teams of the other houses. My role is to work with them and with Kering’s functions to successfully execute all of our strategies.”
“Having a dual role allows me to speak the same language as the CEOs of the houses and to stay grounded as I face the same challenges and issues as they do every day. At the same time, it enables me, as well as all of them, to identify opportunities and trends much better than before, particularly what might be specific to a brand as opposed to industry trends,” she continued. Furthermore, her dual position aids her “in being an even better CEO for Saint Laurent,” where she can rely on a highly capable team.
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