hares in the French luxury conglomerate jumped 5 per cent in early trading yesterday as investors speculated on a potential inflection point for the company. The sharp downturn in revenue is largely attributed to Gucci’s underperformance, which continues to weigh on the group’s financials. However, there is cautious optimism surrounding Bottega Veneta and the potential impact of a new creative direction at Gucci. Gucci: The weight on Kering’s shoulders Gucci remains Kering’s most significant brand, accounting for nearly 50 per cent of group sales and two-thirds of profits. Yet, in 2024, Gucci’s revenue plummeted to €7.7 billion, representing a 23 per cent decline on a reported basis, and a 21 per cent drop on a comparable basis.  The brand posted revenue down 24 per cent for the fourth quarter.  While Kering noted “a slight sequential improvement” in North America and Asia-Pacific, the overall performance highlights Gucci’s ongoing struggle to regain momentum. What went wrong at Gucci? Gucci’s troubles can be traced to a combination of creative stagnation, shifting consumer trends and macroeconomic headwinds, particularly in China. The latest development in Gucci’s leadership turmoil came with the departure of creative director Sabato De Sarno, who lasted just two years in the role. His tenure followed that of Alessandro Michele, who had previously revitalised the brand with his maximalist aesthetic but ultimately saw sales lose steam. According to Mathew Dixon, partner at DHR Global, Gucci’s struggles mirror past cycles of brand fatigue and creative misalignment. “Historically, these things work in cycles; when Tom Ford left, Gucci stagnated. The same has happened after Alessandro Michele’s departure,” Dixon told Inside Retail.  “Both he and Ford built Gucci in their own image, and there requires a period of neutrality before it moves in another direction. De Sarno had a very tough brief. He didn’t want to continue in Michele’s handwriting, but his own taste looked bland in comparison. Add to this the downturn in desirability for brands, particularly in China, and the product simply wasn’t exciting enough to make people buy it.” According to the expert, De Sarno’s vision – rooted in quiet luxury and minimalism – failed to resonate with Gucci’s traditional consumer base. The lack of compelling storytelling, a weak marketing strategy and an unconvincing debut collection left many questioning the brand’s creative direction. The absence of strong media and influencer backing further diminished his ability to establish an authoritative new era for Gucci. “Right from the start, everything was disconnected. The marketing was bland and irrelevant to the product on the catwalk. There was a return to classic Gucci items like loafers, but they were delivered in such a generic way that they failed to excite consumers. It didn’t feel like the brand,” he added.  What’s next for Gucci? Gucci’s Fall/Winter 2025 collection will be presented by the in-house design office on February 25, with Kering stating that a new artistic direction will be announced “in due time.” Industry speculation about who will step in as the next creative director has intensified, with analysts expecting Kering to appoint someone with an established track record and a dedicated following. “Gucci will not experiment with an unknown quantity. They will need someone who can generate immediate traction and press excitement,” Dixon said. Names floated as potential successors include Hedi Slimane and Maria Grazia Chiuri.  “The obvious candidate is Hedi Slimane, who relishes succeeding where others have failed. His aesthetic fits effortlessly with Gucci house codes. Many have questioned his previous fallout with the Kering group, but I don’t see that as an issue if he is given full autonomy as he always demands, and I struggle to see a better candidate for the role,” he added.  With mounting pressure to stabilise Gucci, Kering’s CEO François-Henri Pinault will need to ensure the company’s next move is strategic and decisive. “A new designer brings a fresh narrative, and investors will be reassured by that – hence the share price rebound,” he said. Light at the end of the tunnel  Despite Gucci’s decline, the rise in Kering’s stock price signals that investors view the leadership change as a necessary step towards revitalisation. However, questions remain about the broader luxury market outlook, particularly in China, where consumer demand has softened. The Kering Eyewear division and Bottega Veneta brand, which has steadily grown under Matthieu Blazy’s direction, could provide some upside, but are unlikely to offset Gucci’s decline entirely. Bottega Veneta posted 4 per cent growth in sales last year to €1.7 billion while revenue of the Kering Eyewear and Corporate segment, which includes Kering Beauté, amounted to €1.9 billion, up 24 per cent as reported.  Meanwhile, sales of Saint Laurent and Balenciaga continued to decline but were less significant compared to the flagship brand.  As Kering prepares to unveil Gucci’s new creative leadership, all eyes will be on whether the brand can regain its cultural and commercial dominance. The next chapter of Gucci’s evolution will not just define the brand’s future – it will shape the trajectory of Kering itself. Further reading: Kering’s executive reshuffle: New CEOs for Saint Laurent and Balenciaga.