Gucci’s parent company, the French luxury company Kering, has experienced tumult in the last few years due to a pullback in spending. The company has issued multiple profit warnings as profits tumbled, while its biggest and most lucrative brand, Gucci, has been rocked by the wider luxury industry downturn.
But Gucci has done a fair bit to pull its weight. It appointed Sabato De Sarno, arguably the most important figure within a fashion house, as the new creative director.
Still, the leak couldn’t be plugged. Kering’s shares have fallen over 60% in the last five years and 40% in the last year.
But as the new year kicks off, Gucci, the crown jewel in Kering’s empire, will see a new commander-in-chief take over. Stefano Cantino, who had previously worked at Prada and Louis Vuitton, took over Gucci’s helm on Jan. 1 and will steer the brand through an uncertain 2025.
The 104-year-old Gucci is no stranger to existential threats and revivals. It was on the verge of losing relevance in the late 1980s and early 1990s. By then, it had already established itself among the top luxury players but was losing ground to competitors because of over-licensing the brand. It was also still in the hands of the Gucci family at the time.
A lot happened in the 1990s. Gucci hired Tom Ford as its new creative director and was infamously in the news following the killing of its former head, Maurizio Gucci. Around the same time, LVMH’s CEO Bernard Arnault was eyeing a takeover.
While the murderous scandal continued on one side, Gucci emerged successful under then-CEO Domenico De Sole and Ford’s success, reinforcing its place in luxury fashion.
In 1999, Kering, then called PPR, bought a controlling stake in Gucci and grew the business with Ford and De Sole for several years. Now, Gucci accounts for about two-thirds of the French conglomerate’s profits.
Rejiggering Gucci’s appeal
De Sarno’s arrival at Gucci as creative director was supposed to reset Kering at a time when much of the luxury world was suffering from the post-pandemic normalization in spending. By 2023, there was no shopping spree, particularly among Asian buyers, nor were there signs that luxury aficionados were eager to splurge on designer bags.
But De Sarno’s much-awaited debut in September 2023 received a lukewarm reaction. His designs didn’t quite resonate, and the sales continued to slide thereafter.
Kering’s revenues were down 15% in the third quarter, while Gucci’s, in particular, had fallen 26% year over year.
Kering has also made key changes in its other brands, with new CEOs taking over Saint Laurent and Balenciaga.
Neither the French company nor Gucci has commented on what Cantino has planned in his new role as CEO. It’s unclear whether he’ll keep De Sarno on amid a desperate need to rejigger the brand’s appeal.
Representatives at Kering didn’t immediately return Fortune’s request for comment.
Fashion brands have often had to reinvent themselves amid ever-changing tastes and economic realities, and Gucci has weathered such storms before.
That’s probably why Gucci will persist—and eventually, thrive—in the current storm. After all, it’s “one of the very few mega-brands in the world,” Bernstein’s luxury analyst Luca Solca wrote in October.