Is Gucci Out Of Date?

Can GUCCI use the biggest personnel change in 10 years to restore the decline?

GUCCI's performance in the first 9 months of this year dropped to 2 billion 500 million euros from 3 billion 500 million euros in the same period of 2013, which is significantly less than that of Bottega Veneta's growth of 12% over the same period and the growth of YSL 26%.

Patrizio di Marco and Frida Giannini, the couple will leave GUCCI together in the near future.

December 12th, the third largest in the world

Kai Yun announced that the top two leaders of GUCCI, CEO Patrizio di Marco and creative director Frida Giannini, will leave the group's largest luxury brand in Italy.

The stock price fell by 2.2% on the day of the news.

A week ago, the CEO Michele Sofisti of the GUCCI watch and jewelry department just left.

Kai Yun said that CEO di Marco will officially leave office in January 1st next year. The successor was appointed in April this year as the Marco Bizzarri of CEO in the fashion and leather Department of the group.

Giannini will retire after the 2015 autumn winter series of Milan fashion week in February 2015, and the successor has not yet been identified.

The last time GUCCI experienced similar turbulence was in 2004, when the CEO Domenico de Sole also left GUCCI with star designer Tom Ford.

Previously, Tom Ford not only saved GUCCI on the brink of poor family business.

In the past 10 years, it has become the world's second largest luxury brand after LV.

But 10 years later, GUCCI was in trouble again.

Although its performance still accounts for 1/3 of the group's annual revenue, it has lagged far behind some small brands of the group in recent years.

According to the results of the open cloud report, GUCCI's performance in the first 9 months of this year dropped to 2 billion 500 million euros from 3 billion 500 million euros in the same period of 2013, which is significantly less than that of Bottega Veneta's growth of 12% over the same period and the growth of YSL 26%.

GUCCI sales fell 1.6% in the third quarter, the worst performance of quarterly sales growth in 4 years, and also hit a new low sales volume in China, which is undoubtedly a heavy blow to Kai Yun group.

In the past 5 years, GUCCI has begun to expand completely, adding 200 new stores, far more than 30 of rival LV.

GUCCI has 61 stores in China, and 6 in Beijing. In Shanghai, the two stores of Jiu Guang Department store and Rui department store were separated by only one road.

When the Logo of double G can be seen in many places, the image of GUCCI is somewhat old-fashioned and outdated.

According to HSBC Holdings, GUCCI sales in China fell 2.3% in 2013.

"Now that people are chasing new things, they will think GUCCI is out of date, because we first entered the market."

In a previous interview, di Marco, then GUCCI CEO, talked about her worries about the first financial weekly.

As early as 1996, GUCCI has entered China. It is one of the first luxury brands to start globalizing.

"So many people think that GUCCI is a Logo brand, but this is not true."

Di Marco hopes to change the status quo of GUCCI.

In 2009, he joined the GUCCI from another brand Bottega Veneta of Kai Yun group, and tried to reduce the use of double G logo, recreate classic design with luxurious fabrics, increase the proportion of high-end leather products, reduce wholesale and increase retail outlets, all of which hope to enhance its brand image.

So far, none of these practices has prevented the decline of GUCCI.

Too radical brand promotion strategy has also become one of the reasons for customer churn.

When di Marco took office in 2009, an important task was to correct the mistakes made by former CEO Mark Lee in increasing the number of entry-level products.

Those products once accounted for 85% of GUCCI sales.

In 2013, in the face of the downturn in the Asian market, GUCCI and LV, the two largest global luxury brands, announced high-profile positioning strategies, including the promotion of high priced products and the so-called "Logo campaign".

In the same year, the proportion of GUCCI Logo products increased from 40% in 2012 to 2/3.

Meanwhile, in the past 4 to 5 years, GUCCI has increased its total price by more than 40%.

But the attractiveness of the brand has not risen synchronously with the sharp increase in prices.

Many consumers who originally planned to buy GUCCI entry-level products began to turn to more expensive luxury brands, such as Michael Kors and Longchamp in France.

Compared with a long history of mainstream luxury brands, some of the smaller brands that were founded not long ago were more attractive.

"Chinese luxury consumers are increasingly turning from traditional European luxury brands to some young brands."

Simon Tye, executive director of the French market research firm ipso group, told the first financial weekly.

Even with traditional luxury brands, GUCCI is lagging behind rival LV in making topics that are easy to attract young people.

In 2012, LV opened the first LV home in Hang Lung Plaza, Shanghai, and reappeared in the Bund in the same year.

Custom made train scenery is also specially shipped to Shanghai.

In 2013, LV launched star designer Nicolas Ghesquiere as design director, and invited 2014 fashion films for its spring and summer series, including Fan Bingbing, Giselle, bang Chen, Caroline de Maigret, Edie Campbell, Catherine, Deneuve, Sophia, and so on. In the year of 2013,

In October 2014, LV opened an Art Museum designed by architect Frank Gehry in Paris, and released a limited number of leather bags designed by 6 artists and designers as 160th Anniversary souvenirs.

GUCCI was gradually forgotten at the same time.

It only impresses Li Bingbing in the advertisement of China. Although she is a first-rate star, her image is more focused on hard work and earnest. She neither takes the young fashion route nor luxurious wealth.

Giannini, 42, has been in Gucci for more than 12 years. She has been the creative director of GUCCI from 2006, and her Flora print handbag has been popular in the market although this design has been opposed by Tom Ford.

During her tenure, GUCCI's performance increased by nearly 2/3 and became a more popular brand.

But she rarely received praise from fashion and the media.

Former New York Times columnist Cathy Horyn even commented, "obviously we can't expect Frida Giannini to have any creative design."

In a sense, Giannini has become a victim of her own commercial success, and her self repetition has made people lose interest in GUCCI over time.

Luca Solca, director of the luxury industry research at Paris bank, commented to Reuters. "You can't always live on the classic image of reviving the past, and you need to have radical innovation."

Over the past few decades, the core product of GUCCI has always been around the bamboo knob. Chanel launches 6 series of new products and at least 1 best sellers every year to maintain brand advantage.

YSL, which also belongs to Kai Yun group, is now the fastest growing brand of cloud profit growth.

As of the end of September, the first three quarters of YSL revenue growth of 27.6%, reaching 177 million 800 thousand euros.

This is due to the controversial style changes brought by the director of design Hedi Slimane.

And the retail sales of another brand Balenciaga of Kai Yun also achieved two digit growth.

The relationship between consumers and luxury brands has changed dramatically. People no longer seek identity symbols, but are more concerned about identity.

Some new brands are starting to seize this opportunity.

In November of this year, di Marco and Giannini reiterated to the US women's Wear Daily that they had no intention of leaving the GUCCI, which means that the two may not be motivated by their resignation.

A spokesman for Kai Yun said, "choosing new people to replace di Marco is to bring new impetus to GUCCI and accelerate the pace of development."

In addition to the appointment and removal of CEO and creative director, GUCCI announced in October that it adjusted the organizational structure of the Asia Pacific region in addition to Japan, so that headquarters could communicate more directly with the local market and ensure the effective implementation of brand strategy.

"CEO Francois-Henri Pinault of Kai Yun group told New York Times that" in the past 5 to 7 years, the scale and performance of luxury brands have changed greatly. We are faced with the problem of how to maintain brand luxury while growing. "

Obviously, Pinault looks forward to solving this difficult problem when GUCCI new CEO Bizzarri takes office in January next year.

He said in a statement that he wants Bizzarri to maintain its existing strategy and pform GUCCI into a more high-end luxury brand.

The experience of Bizzarri can not help but have similar expectations.

After all, in 2009s, when di Marco took the post of Bottega Veneta CEO, Bizzarri led the brand to become the second largest contributor to the performance and profit of Kai Yun group.