S1 Special Edition

A NEWSLETTER FROM ANDREA BATILLA

THE FUTURE OF GUCCI

Today’s news is that Sabato De Sarno is no longer the creative director of Gucci. The change is effective immediately and the next women’s show will be presented as a creation of the internal team. Many expected this since the rumor had been circulating for a while and plenty of people felt compelled to express personal opinions, kind of like at Fantasanremo which is a game where people bet on who will win the Sanremo song contest.

Honestly, I find it strange that no one has thought of creating a Fantastilisti given the number of changes, swaps, and returns we’ve seen recently and the number of improvised commentators on social media.

I believe it’s necessary to go a bit deeper into this story.

The French luxury giant Kering closed the third quarter of 2024 with revenues of 3.8 billion euros, down 15% and 16% on a comparable basis. Gucci’s revenue amounted to 1.6 billion euros, down 26%. Yves Saint Laurent recorded 670 million euros, down 13%, while Bottega Veneta posted 397 million euros, marking a 4% increase.

On February 11, the fourth-quarter figures will be released. This explains the sudden separation from De Sarno and hints that the upcoming results might not be good. However, it would be simplistic to think that changing the creative director is enough to regain market trust after negative operational results. It’s not. The factors behind a successful project are complex but it’s true that a strong signal of change must start somewhere.

We are in a period of global crisis due to various factors, mainly the decline in Chinese consumer spending in the case of luxury. There is also political instability stemming from wars and presidential changes.

In this socio-economic climate of widespread fear, it seems that the only brands holding strong are those whose products are perceived as safe-haven investments: Chanel, Hermès, Brunello Cucinelli.

This is the narrative most analysts offer, adding that fashion is no longer fashionable, people prefer to spend their money on travel or fine dining rather than on clothes or handbags.

I’ve said and written many times that this approach, which solely blames external causes for the crisis fashion is facing, will get us nowhere. There are exogenous factors, yes, but there are also serious endogenous ones. The latter are harder and, I dare say, more painful to acknowledge and admit.