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Wednesday 09 October 2024 2:51 pm
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Wednesday 09 October 2024 2:57 pm
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Gucci has appointed Stefan Cantino as its new boss. (Photo credit: ANTONY DICKSON/AFP via Getty Images)
First Mulberry, then Burberry, and now Gucci – reshuffles at the very top of luxury businesses are definitely in vogue.
Gucci, owned by Kering, has announced the appointment of Stefano Cantino as its new chief executive. He will take over from interim boss Jean-Francois Palus on 1 January 2025.
Much like Mulberry and Burberry’s new bosses, Cantino has a hefty in-tray to sort through.
Gucci’s problems this year are not uncommon in the turbulent world of luxury. Revenue, sales and profit are all down, thanks in part to a slowdown in China, in part to the cost-of-living crisis, and in-part due to a creative turnaround which didn’t quite get off the ground.
Shares in parent company Kering have fallen by nearly 40 per cent in the year to date, albeit with a welcome boost after China’s announcement of a stimulus package, and an uptick this morning of just under two percent after Cantino’s announcement.
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Who is Stefan Cantino?
Stefano Cantino is considered by industry insiders as a luxury veteran.
He joined Gucci in May this year as deputy chief executive officer after spending five years overseeing LVMH’s brand communication and image strategies.
Luxury industry veteran Stefano Cantino is Gucci’s new chief executive.
During this period, Louis Vuitton’s sales doubled to over £16bn (admittedly also aided by the luxury boom during and immediately post the pandemic).
Prior to LVMH, he spent two decades climbing the ranks at Prada, working closely with executive chairman Patrizio Bertelli in various communications, merchandising and strategy roles during the company’s global expansion, public offering and lengthy turnaround.
Can he turn Gucci around?
Clearly competent in the field of branding, analysts have questioned how knowledgeable he is around product and merchandising, which has “arguably been Gucci’s Achilles’ heel in recent years”, according to RBC analysts.
New creative director Sabato De Sarno’ highly-anticipated runway debut in September 2023 was met with lukewarm reviews, and the brand has struggled to maintain its desirability and cachet during the luxury downturn.
RBC noted a “handful” of cases of executives in the luxury sector with marketing and branding experience who go on to become successful bosses.
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Pietro Beccari, in particular, was marketing director for Louis Vuitton and went on to a successful stint as chief of Dior and now runs Louis Vuitton.
Analysts said they saw the appointment as overall “a positive for Gucci and Kering… Gucci needs external (LVMH) experience, with a more radical approach to addressing challenges.”
Jelena Sokolova, Senior Equity Analyst at Morningstar, said she was “previously concerned about the lack of clarity in decision-making and accountability by top management at Gucci” but considers the streamlining of managerial power to be “positive.”
“We also previously argued that for a brand of Gucci’s size, which relies 70 per cent on carryover sales, successful marketing may be just as important or even more important than a strong creative vision. In that sense, Cantino’s profile fits the bill,” Sokolova added.
She urged investors to look to the long-term, as the “situation at Gucci is not easy to fix, given the tough backdrop… we believe patience with this stock could pay off.”
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