Florence (Italy) (AFP) – When executives from luxury giant Kering sit down for an investors’ day in Florence on Thursday, the troubled Italian fashion icon Gucci is likely to be foremost in their minds. The giant Paris-based fashion conglomerate, which also owns Yves Saint Laurent and Bottega Veneta, is meeting in the birthplace of its flagship double-G brand, which continues to weigh on its profitability and sales.
Now under the management of Luca de Meo, the highly rated former head of Renault, Kering is hoping he can work some magic and rekindle what was once the bright spot in the group’s fashion portfolio. “Gucci has had all sorts of issues. It’s had issues on distribution. It’s had issues on product. It’s had issues on pricing,” said Flavio Cereda, a luxury sector specialist at GAM, an investment firm. “Do people care about Gucci today? I don’t think they do. Can people care about Gucci in six months’ time? It’s perfectly possible. We just don’t know.”
The financial balance of the entire Kering group is at stake, with Gucci accounting for around 40 percent of its revenues in 2025. Hopes also rest on the house’s new creative director, the Gen Z streetwear favorite Demna Gvasalia, who moved over from Kering-owned Balenciaga in July last year after a stellar run at the Spanish heritage brand. After a short-lived experiment with Italian designer Sabato De Sarno, Kering chairman Francois-Henri Pinault said at the time that Demna — who uses only one name — was “exactly what Gucci needs.”
In a letter published in February outlining his vision, the 45-year-old Georgian said he was focused on “the coexistence of heritage and fashion… Gucci only exists when both are in sync, when both nourish each other.” The often controversial designer, with celeb fans from Charli XCX to Kim Kardashian, has yet to arrest the slide. In the first quarter of 2026, Gucci once again saw its sales decline, by 14 percent to 1.35 billion euros, according to figures published on Tuesday. Sales continue to shrink in the key market China, while the war in the Middle East is also hitting demand there while turning consumers everywhere more cautious.
Shares in Kering are down 18 percent over the last six months. Although analysts at global bank HSBC believe 2026 could mark a rebound thanks to the tandem of de Meo and Demna, others are more skeptical about a return to the Gucci golden age under Tom Ford in the 1990s. “While the group’s trajectory is definitely moving in the right direction under the new CEO, Gucci’s turnaround is not yet reflected in the numbers and its timing remains uncertain,” commented analysts at the Paris-based ODDO BHF brokerage on Wednesday.
© 2024 AFP
