LOS ANGELES, CA - NOVEMBER 01: CEO of Gucci Patrizio di Marco (R) and Creative Director of Gucci Frida Giannini attend Gucci's presentation of The Restoration Premiere of "Rebel Without A Cause" at LACMA on November 1, 2013 in Los Angeles, California. (Photo by Jason Merritt/Getty Images for Gucci)

For a decade at Gucci, Patrizio di Marco and Frida Giannini had presided over one of the world’s best-known luxury brands in the sometimes fickle world of fashion

But even with this record, the pair — who are partners in their personal as well as professional lives — had been coming under pressure in the face of waning sales in recent years at the most important brand in the portfolio of Paris-based Kering. Third-quarter like-for-like sales fell 1.9 per cent compared with a year earlier.

And on Friday, Gucci revealed the departure of Mr di Marco as chief executive and Ms Giannini as creative director. So what went wrong for them?

● The first part of the answer is China. Like Louis Vuitton, its biggest rival, Gucci expanded rapidly in the world’s most populous country, tapping into the country’s economic growth and wealth creation but also its love affair with luxury.

At first, the results were startling, and Chinese clients today account for an estimated 30-35 per cent of total sales — about 15 per cent in Hong Kong and Macao, some 10 per cent in mainland China and at least another 10 per cent by Chinese tourists buying in Europe and elsewhere.

Yet analysts say that the expansion was so quick in the last few years that it sometimes skipped a beat, with the brand taking short-cuts on location, having a weak local organisation and failing adequately to control the grey market. Gucci’s recent appointment of a new China CEO spoke to some of these problems.

● Bling. Gucci’s breakneck expansion produced varying degrees of saturation in a market in which consumers were learning fast about luxury and starting to shift from the more “entry-level” bling to less showy and more sophisticated styles.

Sensing the shift, Gucci began to go upscale, relaunching its handbags several years ago with more luxurious materials and considerably higher price points. “It goes hand in hand with the fact that as a luxury brand, you promise exclusivity,” says Luca Solca, luxury analyst at Exane BNP Paribas. “If you become too popular too fast, you risk losing that exclusivity.”

● More competition. Most industry analysts agree that the repositioning was the correct strategy. But they also point out that China is a more competitive market today than it was a decade ago. Back then, there were a limited number of luxury brands, and the likes of Gucci and Louis Vuitton dominated the market.

Today, however, there are many brands that the two former incumbents have to compete with. This is true both at the high end and entry level, with myriad so-called “aspirational” brands appearing in the marketplace. As Mr Solca puts it, “Consumers have a choice. They have also become sophisticated. If you don’t bring enough novelty, you slide.”

So what is next for Gucci?

The appointment of Mr Bizzarri will doubtless reassure investors. Mr Bizzarri has been the CEO of Kering’s “Luxury — Couture & Leather Goods” division since April last year, and enjoys a solid reputation as a capable manager with a track record of delivering results.

That is what he did as CEO of Bottega Veneta, a post he took up in January 2009. Before that, he was CEO of Stella McCartney.

Yet improving fortunes at Gucci are unlikely to come overnight. Kering confirmed on Friday that it would only appoint a new creative director next year, meaning that the new creative blood will only kick in for the Spring and Summer collections of 2016. All in all, it looks as if investors will have to wait at least 18 months to see any meaningful changes in the numbers.

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