“We did not see a ‘big bang’ during Sabato De Sarno’s debut catwalk show,” wrote Bernstein’s Luca Solca, who has downgraded Kering’s shares, and growth projections for Gucci.
— October is bringing more tricks than treats to the big luxury goods groups, two of which have seen their stocks downgraded by industry analysts. ’s share price target to 492 euros from 582 euros, declaring there was “no big bang” in Milan. In short, Bernstein’s team didn’t see enough onRBC Capital Markets
Solca noted that the two retailers on Bernstein’s panel “are not going to buy more, and possibly less, than before,” and added that a “softer consumer demand environment in [fiscal 2024] could further exacerbate Gucci’s performance issues. Consumers cut their shopping lists in a slowdown, and Gucci is still in transition. The Kering CEO [François-Henri Pinault] said himself that it will take time for Gucci to find its new footing.
As reported, the luxury group has been looking to reshape itself as a dynamic player in an ever-more competitive space and seek new avenues of growth as sales momentum fades at its flagship brand Kering has also been under pressure from activist investors to make a transformational acquisition that would put it on a more equal footing with rival LVMH and make it less reliant on Gucci, which accounted for 67 percent of the group’s operating profit last year.
Solca said panelists agreed that De Sarno’s Gucci “definitely marks a welcome inflection relative to what we had seen with [his predecessor] Alessandro Michele. De Sarno has come to the catwalk with a coherent project, avoiding the trap of trying to please everyone with different things — unlike Riccardo Tisci had done at Burberry.”
One chart shows a spike in Kering’s share price between 2016 and 2021, due to Michele’s “more is more” approach at Gucci, while a photo compilation sets out to prove that De Sarno should work harder on accessories.
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