Shares in Kering saw a boost on Wednesday following the announcement that the chief executive of Gucci, the company’s most important brand, will be departing. Gucci has been facing challenges in keeping up with its competitors in recent times.
At 0805 GMT, Kering’s shares were trading 5.5% higher at EUR521.70.
Marco Bizzarri, who has been Gucci’s boss since 2015, will be leaving the company. In the interim, Jean-Francois Palus, the group managing director, will be taking over as the brand’s leader, Kering revealed on Tuesday evening.
As part of the management shakeup, Yves Saint Laurent CEO Francesca Bellettini and finance chief Jean-Marc Duplaix have been appointed as deputy CEOs. Bellettini will continue in her role as Yves Saint Laurent CEO.
Gucci is responsible for the majority of Kering’s revenue and earnings. However, it has fallen behind luxury-fashion rivals like Hermes, Louis Vuitton, and Dior. In the first quarter of this year, Gucci’s growth was nearly flat compared to the previous year, while its peers experienced surging sales. Since the beginning of the year, Kering’s shares have only increased by 9.8%, whereas shares in Hermes have risen by more than 31% and LVMH Moet Hennessy Louis Vuitton, the owner of LV and Dior, has seen a 27% rise.
Kering had already appointed Sabato de Sarno as the new creative director for Gucci at the start of the year in an attempt to inject fresh energy into its collections.
According to analysts at Bernstein, the decision to replace Bizzarri appears to be strategically timed to coincide with De Sarno’s debut collection for Gucci this autumn, in order to showcase a new chapter for the brand.
“It becomes now very important that the new Gucci team score some goals and win some matches, to give investors confidence that we are indeed on the right path,” the analysts said.
This broader reshuffle will enhance decision-making, governance, and succession plans. Citi analysts Thomas Chauvet and Lorenzo Bracco emphasized that it also demonstrates Kering’s commitment to transforming Gucci.