Gucci names De Sarno as creative director with task of reviving brand

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(C) Reuters. A Gucci sign is seen outside a shop in Paris, France, January 27, 2023. REUTERS/Sarah Meyssonnier/Files
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By Silvia Aloisi and Mimosa Spencer

PARIS (Reuters) – French luxury goods group Kering (EPA:PRTP) has appointed Sabato De Sarno, a senior fashion designer at Valentino, as creative director of its top brand Gucci, it said on Saturday.

At Gucci, he will be tasked with reviving the fortunes of a brand that accounted for two-thirds of Kering’s profits in 2021 but has been losing momentum in recent years after stellar growth in 2015-19.

De Sarno, 39, began his career at Prada (OTC:PRDSY) in 2005, before moving to Dolce & Gabbana and then joining Valentino in 2009, where he held several positions before being appointed fashion director overseeing both men’s and women’s collections, working closely with chief designer Pierpaolo Piccioli.

A red carpet favourite, Piccioli is known for adding a contemporary flare to the storied Italian label’s extravagant breed of glamour, generating buzz for example with head-to-toe bright pink looks for American singer Zendaya.

“I am proud to join a house with such an extraordinary history and heritage, that over the years has been able to welcome and cherish values I believe in,” De Sarno said in Kering’s statement. “I am touched and excited to contribute my creative vision for the brand.”

He will present his debut Gucci runway collection at Milan Women’s Fashion Week in September 2023.

Gucci CEO Marco Bizzarri said that having worked with a number of Italy’s most renowned luxury fashion houses, De Sarno “brings with him a vast and relevant experience.”

The choice of a seasoned but relatively unknown designer with years of experience working behind the scenes echoes the group’s strategy when it appointed its previous creative director Alessandro Michele, who did not have a public profile at the time of his appointment in 2002.

“We salute Kering’s decision,” said Luca Solca, analyst with Bernstein. “Gucci – and the Kering shareholders – need courage and an original point of view.”

Solca noted that De Sarno’s profile was reassuring. “The eyes of the world will be on him to see if he also has the required creative genius.”

SOARING GROWTH

Gucci had been under pressure to quickly appoint someone to one of the top jobs in fashion after the abrupt departure in November of Michele, known for his flamboyant and gender-fluid styles and a favourite of singers Harry Styles and Lady Gaga.

He had been in the job seven years but left following tensions with Kering’s top management, sources told Reuters.

Alongside Bizzarri, he had overseen a period of soaring growth at Gucci between 2015 and 2019, with profits increasing nearly four-fold to just under 10 billion euros ($11 billion) and revenue almost trebling.

But in recent quarters, Gucci had begun to lag rivals including Hermes and LVMH’s top brand Louis Vuitton, with its performance in the key Chinese market becoming a source of concern for investors amid COVID-19 lockdowns.

Kering is due to publish full-year results on Feb. 15.

Investors will be keen to hear how the business fared after Beijing lifted its COVID restrictions late last year, leading to huge infections and the disruption of business across the country.

LVMH and others have said sales recovered somewhat in the lead-up to China’s Lunar New Year holiday.

But Kering’s shares were the worst performers among major luxury brands and lagged the Paris CAC 40 and pan-European STOXX 600 index over the past three years.

The stock has risen 10% since January 2020 compared with a more than 100% rise in LVMH and Hermes.

($1 = 0.9202 euros)

Graphic: Gucci-owner Kering shares have lagged rivals https://fingfx.thomsonreuters.com/gfx/mkt/mopakjxbzpa/gucci.PNG