KER Kering

By Joshua Kirby and Maitane Sardon

Shares in Kering rose Wednesday after the company said it is parting ways with the chief executive of Gucci, its most important brand, which has struggled to keep pace with rivals recently.

At 0805 GMT, shares traded 5.5% higher at EUR521.70.

Marco Bizzarri, Gucci boss since 2015, will leave the company, with group managing director Jean-Francois Palus taking the reins of the brand in the interim, Kering said late Tuesday.

The French luxury conglomerate also said it has named Yves Saint Laurent CEO Francesca Bellettini and finance chief Jean-Marc Duplaix as deputy CEOs as part of the management shakeup. Bellettini will continue as Yves Saint Laurent CEO.

The move comes as Gucci, which contributes a majority of Kering's revenue and earnings, has lagged luxury-fashion rivals such as Hermes, Louis Vuitton and Dior. In the first quarter of the year, Gucci booked barely flat growth on the year, in stark contrast to surging sales at those peers. Kering's shares are only up 9.8% year-to-date, while those in Hermes are up more than 31% and those in LVMH Moet Hennessy Louis Vuitton, owner of LV and Dior, have risen 27%.

Kering appointed a new creative director for Gucci, Sabato de Sarno, at the beginning of the year, in a bid to inject some vim into its collections.

The decision to replace Bizzarri seems timed to give full visibility to a new chapter in Gucci's story, ahead of De Sarno's debut collection this autumn, analysts at Bernstein said in a note following the news.

"It becomes now very important that the new Gucci team score some goals and win some matches, to give investors confidence that we are indeed on the right path," they said.

The wider shakeup meanwhile reinforces decision-making, governance and succession, while demonstrating Kering's determination to transform Gucci, Citi analysts Thomas Chauvet and Lorenzo Bracco said in their own note.

Write to Write to Joshua Kirby at joshua.kirby@wsj.com and to Maitane Sardon at maitane.sardon@wsj.com

(END) Dow Jones Newswires

July 19, 2023 04:23 ET (08:23 GMT)

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