PARIS (Reuters) - Outgoing Balenciaga boss Isabelle Guichot, who was expected to remain with parent Kering (PRTP.PA), has reached an agreement to leave the French luxury and sports group, market sources told Reuters.
Guichot was replaced at the end of November by Cedric Charbit, previously head of merchandising at Yves Saint Laurent, one of Kering’s must successful fashion brands.
When her resignation was announced in October, Kering said Guichot would stay within the group. Balenciaga has estimated annual sales of around 400 million euros (348.55 million pounds).
Kering and Guichot declined to comment.
Her departure is the latest in an unprecedented wave of management changes at Kering in the past two years during which the group replaced the management or creative leadership or both at around 75 percent of its 15 luxury companies.
It also coincides with a severe downturn in the luxury goods sector which is forcing big brands to fight harder for market share and sales growth without the artificial boost of price hikes and new boutiques.
“It is clear that when things don’t work as expected, you need to speed up management turnover,” said Exane BNP Paribas analyst Luca Solca. “All the more so in a difficult market, where we expect groups to have thinner patience with under-performers.”
Fashion brands Balenciaga, Bottega Veneta, Gucci, Saint-Laurent, Christopher Kane, Alexander McQueen and Brioni; jewellers Pomellato, Boucheron, Qeelin, and Sowind, the watch unit behind Girard-Perregaux and JeanRichard, have all had new designers or CEOs since 2015.
If the number of rolling heads at Kering is notable, there have also been changes at the top of other luxury brands such as Chanel, Burberry (BRBY.L) and LVMH’s Dior and Celine, with more to come this year.
Last week, it emerged that Richemont’s (CFR.S) Chloé was going to hire Louis Vuitton’s No.2 designer to replace departing artistic director Clare Waight Keller.
The creative and management leadership of Louis Vuitton could also change, industry sources have said.
At Kering, musical chairs started in earnest at the end of 2014 when Gucci’s creative and management duo were ousted, replaced by Alessandro Michele and Marco Bizzarri.
Bizzarri had just moved on as Bottega Veneta chief executive to head Kering’s luxury couture and leather goods unit.
Sources close to the group said Bizzarri influenced the appointment of new CEOs at Brioni, Bottega Veneta and Tomas Maier, the eponymous brand of the Bottega Veneta designer.
“We have brands at different stages of maturity so we have to be as reactive as possible,” Kering Finance Director Jean-Marc Duplaix said in a conference call in October.
Insiders say reshuffles often rest on the assumption that changes create excitement at a brand and can help lift sales.
The downside risk, however, is that changes can also confuse staff and partners about strategy and direction.
“The problem is that they make changes even when things are going well, which can be disruptive for teams,” one source close to Kering said. “And there is always someone who will tell Kering Chief Executive Francois-Henri Pinault he could do a better job than the current person in place.”
Pinault and Kering group managing director Jean-Francois Palus, are not known for being heavily involved in the day to day running of the brands, industry sources said, leaving a lot of freedom to the brand’s management teams.
Pinault and Palus, who live in London, only come every other week to Paris.
Such a management model contrasts with that of LVMH (LVMH.PA) boss Bernard Arnault, who constantly breathes down his executives’ neck, monitors progress and is known for surprise shop visits to see for himself what is going on, sources add.
In September, Kering appointed former Hugo Boss Chief Executive Claus-Dietrich Lahrs as head of its Italian leather goods maker Bottega Veneta, the group’s second biggest in terms of revenue behind Gucci but with declining sales. [L8N1CU4U2].
Lahrs replaced Carlo Beretta who had become chief executive of Bottega Veneta just 18 months ago.
The future could be uncertain for the chief executive of Brioni after the brand’s failed gothic makeover under Justin O‘Shea who left in October after just seven months in the job, people close to Kering said.
O‘Shea had transformed Brioni from a classic Italian suit maker into a rock chic brand with a new logo that sold velvet outfits costing 3,000 euros backed by adverts featuring heavy metal band Metallica, a change few consumers understood.
Brioni, now lossmaking, has seen its sales plummet to around 160 million euros last year from a high of more than 200 million euros in 2013, a source close to the group said. Kering declined to comment on the numbers. In 2010, the year before Kering bought Brioni, sales totalled 170 million euros.
There was also the unexplained summer resignation of Grita Loebsack, head of Kering’s emerging luxury brands such as Brioni and Balenciaga, over strategic differences. Loebsack, who joined from Unilever, stayed less than a year at the group.
Reporting by Astrid Wendlandt; editing by Jason Neely and Alexandra Hudson