Weeks after joining Gucci as deputy chief executive in May, Stefano Cantino announced that he will be working with stars and owners as the Italian brand takes over London’s Tate Modern for a lavish runway show. He was on par with Kering’s upper management.
But the huge afterparty, where Kering executives mingled with guests and supermodel Kate Moss hitched a ride to Mark Ronson’s DJ booth, largely overshadowed the difficulties of the predicament facing Gucci. Not yet.
When Kering announced this week its decision to promote Mr. Cantino to chief executive officer of the French luxury conglomerate’s largest brand and profit center, they announced that he had spent five years at LVMH’s Louis Vuitton and 20 years at Prada. He worked there for a year, and was expected to lead the Florentine maison out of decline. .
That’s a tall order. Cantino is now charged with carrying out the sector’s biggest and most complex turnaround as global demand for high-priced handbags and fashion wanes and growth engine China slumps. .
Citigroup’s Thomas Chauvet said: “I’m not surprised that Stefano Cantino is taking over as CEO. This has been the plan from day one,” but said that given the level of market weakness and the pressure on Gucci, It may have heightened the sense of urgency, he added.
“I don’t expect a revolution.” There will be.
Gucci needs to make a quick comeback.
Kering has issued an unusual number of profit warnings for a major luxury brand group this year, citing soaring sales for its brands, and has said it expects group operating profit in the second half of the year to be 30% lower than in the same period. warned investors. In 2023.
Barclays expects Gucci’s sales to fall 23% in the third quarter from a year ago.
Cantino was born in Turin and studied political science at the city’s university before joining Prada. During his 20 years at the luxury group, he rose to become head of communications and marketing, working closely with Francesca Berrettini, who is now Kering’s deputy CEO.
They stayed in touch after he left in 2018 to join Louis Vuitton, which was experiencing rapid growth under CEO Michael Burke. It became the first luxury brand to have annual sales of over 20 billion euros.
The 57-year-old has been at the helm of Gucci during a period of flux, with new designer Sabato de Sarno creating six collections in less than two years, following the departure of former star designer Alessandro Michele. are.
Mr. Cantino replaces Jean-François Palus, a 30-year Kering veteran who was appointed Gucci’s interim CEO in July 2023 and is a close ally of group CEO Francois-Henri Pinault. .
The interim role became permanent in February, but people familiar with the situation said the plan was always to make a fairly quick transition.
Palus’ goal was to “assess Gucci’s situation, improve efficiency, and find a CEO.” . . We identified Stefano very quickly,” said a source close to Kering.
Cantino “combines exactly what Gucci needs, because Gucci is a company with two souls: the soul of tradition and the soul of fashion,” the source added. “With his experience at Prada and Louis Vuitton, he has the best of both worlds. That dual experience is invaluable to us.”
Since joining Gucci, Cantino has been described by those who have worked with him as direct, rigorous, and analytical, as well as charming and well-connected in the fashion world. He has worked closely with De Sarno on several new works. The campaign features Blondie rock star Debbie Harry while working with the Gucci team to improve the product line and mix.
In addition to battling a slowdown in the global luxury goods market, Gucci is also rethinking its aesthetic and image, years after Michele’s maximalist vision that at one time made the brand a huge success stopped selling. I’m working on it.
Kering hopes De Sarno’s sleeker, more streamlined style will help it achieve its strategy of elevating the brand and making it more timeless, making it less susceptible to trend cycles. There is. But it’s not yet clear whether Gucci customers agree.
Cantino’s background in image and communications strategy may raise concerns about his operational experience, but people close to Kering say he has the necessary skills. are.
At Prada, he worked on brand positioning and communications, key issues facing Gucci, as well as strategy and acquisitions, including the 1999 deal to buy British shoe manufacturer Church.
Inside Kering, rival Louis Vuitton appointed the late visionary streetwear designer Virgil Abloh, then musician and producer Pharrell Williams, to design menswear, and during Cantino’s tenure at the brand. Executives noted that the company had given a major boost and expanded its customer base.
A source close to Kering said that at Louis Vuitton, “he accomplished a lot in terms of product architecture.” “[Gucci’s]turnaround is not just about buying and turning around a publicly traded company, it’s about turning around large areas within a large organization. This is where he really excels.”
This isn’t the first time Kering has had to reinvent Gucci, but the brand still has a long way to go.
Analysts at Barclays say that while “it will certainly take time to change brand perceptions through outlet reduction (and a decline in brand standing),” they believe that “Gucci’s recovery story may be delayed.” ” . . We believe our current forecasts may be too ambitious and there is a risk of further earnings reductions. ”
Citi’s Chauvet said Cantino is expected to take over in January and that “we have a complete cast.” “Now, all that’s left to do is execute.”
