According to analysts, Sabato De Sarno, newly appointed as creative director by Kering (PRTP.PA), must bring new life to the valuable Gucci brand.
This is a challenging job, considering the importance placed on maintaining the brand’s timeless appeal by executives.
As a senior fashion designer from Valentino, De Sarno’s mission is to revitalize Gucci, which in 2021 generated two-thirds of Kering’s profits.
Emphasizing classics was a focus mentioned by company executives during the investor presentation last year. Gucci has recently brought back its iconic bamboo-handle handbag from 1947 and its over-the-shoulder Jackie bag from 1961.
However, analysts believe that De Sarno must also introduce new, trending styles, a strategy that has traditionally worked well for the brand, in contrast to some competitors that concentrate more on classic signature pieces, particularly handbags.
An analyst at Exane BNP Paribas, Antoine Belge, stated, “The future of Gucci is not to become another Vuitton, Chanel or Hermes, but to enhance its fashion offerings to attract customers back to the brand.”
Kering declined to comment on its strategy for Gucci. The company was under pressure to appoint someone quickly to the creative director role at Gucci after the sudden departure of Alessandro Michele in November.
The flamboyant designer, popular with celebrities such as Harry Styles and Lady Gaga, led tremendous growth from 2015 to 2019 with his unique and gender-neutral designs.
However, in recent quarters, Gucci has struggled to keep pace with rivals such as Hermes and Louis Vuitton, with its performance in the crucial Chinese market becoming a cause for concern among investors during the COVID-19 lockdowns.
According to Luca Solca, an analyst at Bernstein, Gucci needs to make a bold statement to regain its prominence. “Gucci has to be over the top to succeed,” Solca said.
Analysts have welcomed Kering’s appointment of a seasoned yet relatively unknown designer, noting that previous creative director Alessandro Michele needed to be more well-known when he was appointed in 2002.
Another bold move that may work again,” commented Flavio Cereda, an analyst at Jefferies, though he warned that the new director’s task will not be “easy this time.”
Cereda highlighted potential challenges, such as the turmoil that may arise from bringing in an outsider while the previous designer’s team is still in place and the time it will take for the market to understand a new direction from the brand.
De Sarno will unveil his first Gucci collection in September in Milan. His background at Valentino suggests a “less eccentric style” than Gucci’s previous designer, according to Carole Madjo of Barclays.
All eyes will be on De Sarno’s talent and creativity and how he can collaborate with Gucci’s merchandising team, said Caroline Reyl, head of premium brands at Pictet Asset Management.
Creative directors face close scrutiny during a brand’s transition, Reyl noted.
De Sarno’s appointment was announced ahead of Kerning’s Feb. 15 earnings release, which is expected to show a slowdown in the company’s fourth-quarter sales, one of the more pronounced among the world’s top fashion labels, due to the coronavirus disruptions in China.
Kering’s stock price was mostly unchanged on Monday, down 0.1% at 1333 GMT.
As De Sarno prepares to showcase his first Gucci collection in September, the fashion world will be closely watching his talent and creativity and how he will collaborate with the merchandising team at Gucci.
The pressure is high for creative directors during a brand transition, and the success of De Sarno’s tenure will be a crucial factor in determining the future of the brand.
Kerning’s earnings release in February is expected to show the impact of the COVID-19 disruptions in China on Gucci’s sales, adding to the already high stakes for De Sarno as he begins his new role.
