French luxury group Kering announced that it has promoted Alessandro Michele, who was head of accessories at Gucci, to the role of creative director. Michele is replacing Frida Giannini. Giannini and CEO Patrizio di Marco were asked to step down at the end of 2014.
Kering’s move is based on their hope that Gucci’s brand and accessories will drive future sales. Analysts believe that Gucci has great potential in the luxury goods market because leather goods, especially shoes and handbags, are one of the fastest-growing categories of luxury goods.
Kering hopes that Michele will bring new ideas and that new handbag and accessory designs will bring past customers back to Gucci. Michele was chosen because of his vision for the brand. Kering said in a statement that Michele will have total creative responsibility for all of Gucci’s collections and the label’s image.
Kering is the third-largest luxury group in the world, after France’s LVMH Moet Hennessy Louis Vuitton and Switzerland’s Richemont. Kering’s brands include Gucci, Balenciaga, Alexander McQueen, and Yves Saint Laurent.
Accessories make up almost one third of the $250 billion luxury goods market. Accessories and leather goods tend to sell well even in tough economic times.
Even though the luxury goods industry has slowed down, many of Kering’s smaller brands have been performing well. However, Gucci, which is responsible for almost a third of the group’s annual revenue, has seen declining sales. Luxury goods customers, especially those in China, are choosing subtle designs without flashy logos.
While he was CEO, di Marco began moving into higher-end luxury, especially handbags. Leather goods accounted for nearly 60 percent of Gucci’s sales in its 2013 fiscal year. Di Marco’s successor, Marco Bizzarri, intends to continue that strategy.
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