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A top Kering executive has said the French luxury group is going back to basics as it is battling to revive the fortunes of its underperforming flagship brand Gucci.
Speaking at the Financial Times’ Business of Luxury conference on Monday, Kering deputy chief executive Francesca Bellettini said that Gucci needed to build “sound foundations” after a period of fast growth that was now coming to an end.
“What we are going to do at Kering, [and] at all the brands learning from Gucci, is to become more focused — even while growing — on the foundation,” Bellettini told the conference.
“It is true in life but also in business that sometimes it’s easier to go fast, fast, fast . . . If I draw a parallel to the luxury industry, if you don’t create that structure underneath in terms of operational capability, efficiency practices, planning you don’t have [a] sound foundation,” she said.
The Kering veteran was referring to a period of rapid growth at its brands led by Gucci, but that has now tapered and left fissures in the business exposed.
Belletini was appointed to her role last year to oversee all of the group’s brands — which include Bottega Veneta, McQueen and Balenciaga — as part of a reshuffle at the top of the group led by billionaire chief executive François-Henri Pinault.
Paris-listed Kering has been dogged by the underperformance of Gucci, which accounts for half of group sales and two-thirds of profits. Belletini, who has been at the French group for more than two decades, also remains chief executive of Saint Laurent, the group’s second-biggest brand by revenues.
Kering is focused on turning around Gucci and improving performance across the group amid an industry-wide slowdown. It has suffered more than competitors such as LVMH and Hermès, as demand for Gucci’s maximalist aesthetic popularised by former star designer Alessandro Michele waned.
Kering’s sales fell 10 per cent in the first quarter, compared to 3 per cent growth at industry giant LVMH. Paris-listed rival Hermès posted 17 per cent growth in revenues. Pinault is now betting on Gucci’s new creative director Sabato de Sarno, whose collections are being rolled out in stores, to revive growth.
“Don’t waste the opportunity coming from a good crisis, because in a crisis you really have to focus on what you can control. That has been my motto with my team all of my career,” Belletini said.
“We had already started by February . . . to work on enhancing the brand’s attractivity, working on exclusivity of the brand, the quality and the efficiency,” she said.
This included making crucial hires in the team around Gucci. A new head of operations is focusing on initiatives such as reducing lead times to get leather goods to market.
“It’s not going to be a one man show at Gucci . . . We are going through a transition, not a revolution.”
Belletini believes De Sarno, the first “outsider” to be appointed as Gucci creative director, can bring fresh perspective on how to rebuild the brand. By always promoting creative directors internally “you can build ways of working that are not always right for the future”, she said.
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