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The Business of Fashion Podcast
Breaking News: Demna Takes Gucci, Versace Enters a New Creative Chapter
00:26:38
As Demna is set to become artistic director of Gucci, and Donatella Versace passes the baton to Dario Vitale after nearly three decades at the creative helm of Versace, the fashion industry is bracing for much-needed creative transformation.
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- [00:00]
Imran Ahmed
Foreign this is Imran Ahmed, founder and CEO of the Business of Fashion. Welcome to a special breaking news episode of the BoF podcast. It's Friday, March 14th. Yesterday, news broke that the disruptive designer Demna has been named as artistic director of Gucci, bringing him to the creative helm of Kering's most important fashion brand, a brand that drives more than half of revenues and two thirds of profits for the French luxury group.
- [00:34]
Tim Blanks
So Demna is going from a single digit billion dollar business to a double digit billion dollar business. You feel the smaller business is, in a funny way, less constraining than the big business.
- [00:47]
Imran Ahmed
Meanwhile, Donatella Versace is stepping down as Chief Creative officer. Versace, making room for Dario Vitale, formerly of Miu Miu, to take the creative lead. With so much breaking news and so much change happening in fashion, it felt like a good time for Tim Blanks and I to catch up on what it means and what to expect. So here's Tim Blanks on a very special breaking news episode of the BoF podcast. Tim, thank you for taking time to join me to discuss some breaking news in the industry this week. Yesterday. We're recording this on Friday 14th March at 10am London time. Yesterday was quite a monumental day, another monumental day in breaking fashion news with the announcement that not only is Donatella Versace stepping down as Chief Creative Officer at her brand Versace, but also perhaps the even more surprising news that Demna has been appointed the new Creative Director of Gucci. I thought given the importance of this news, that it would be good to chat through with you your reactions. Just as a bit of context, the Demna Gucci news was broken last night after the French markets closed. And the reaction this morning from the markets has not been great. The carrying shares are down 12% following the announcement of that news. And of course, Gucci is critical to both the overall revenue and profit of Kering. So the market was watching for disappointment closely. At least the financial analysts don't seem convinced by the appointment. We also did a poll on BoF's Instagram account when we broke the news on our channels yesterday, and more than 9,000 people have responded to that poll and 64% of them have said that they don't think Demna is a good fit for Gucci. Only 10% believe he's the right choice. So clearly from a customer standpoint, from a financial market standpoint, this appointment is not being met with perhaps unmitigated joy. Unmitigated joy. But Tim, I'm curious. You've seen the ins and outs of this industry for quite some time and seen appointments like this come and go. You've seen the ones that worked and the ones that haven't worked. What was your initial reaction when you first heard the news?
- [03:34]
Tim Blanks
I mean, just a couple of things. I don't think it's ever been as volatile as it is in all these years. Sure, people were appointed at design houses, but there's never been. I mean, what I liked about yesterday, finally there was this endless drip feed of speculation. There was some resolution. Two appointments in the same day, two appointments that people have been kind of talking about, possibilities that people have been talking about for a while. I mean, I find it hard to divorce my reaction from the fact that I felt I heard this was gonna happen a while ago. It wasn't a thunderbolt out of the blue to me. I mean, there were some other names who seemed pretty close to the finishing line as well, and I think I would have been equally unsurprised if it had been one of them.
- [04:23]
Imran Ahmed
So you weren't caught by surprise at all because, I mean, people were talking about Hedi Sliman and people were talking about, you know, Fabio Zam Bernardi and, like, the names that were rolling around.
- [04:34]
Tim Blanks
And, you know, and we read that Jonathan Anderson was spoken to, Maria Grazia Chiuri was spoken to. It wasn't like, I mean, Gucci was in play. And also, you know, would also heard that Demna was leaving Balenciaga for a long time. That's being talked about. And you have it on absolute, you know, swear on the Bible authority that, oh, he's leaving it all behind and he's moving to LA to start a family. You know, this was a story. But at the same time, he's going to Gucci or he's leaving Valencia. He's definitely leaving Valencia. This is all definitely happening. I suppose my reaction to the appointment isn't shock, but I guess I'm slightly bemused. We have talked about this a lot, curiously enough, in relation to Alessandro Michelli leaving Gucci to go to Valentino, or leaving Gucci and then being appointed at Valentino sometime later. You know, the interesting irony is that he and Demna worked on a collection.
- [05:34]
Imran Ahmed
Together, the Hacker collection.
- [05:36]
Tim Blanks
Yeah. Which I do not think is a prelude to whatever we're going to see next. I really, really don't. And, you know, they're both big houses for caring, and there's a sort of synchronicity in their stories in a way that appointments of a relatively unknown quantity to an enormous design House with a very, very successful legacy. What I hold onto here is that apparently he did a dummy run collection which was brilliant according to the people who have appointed him to this position. Not anything to do with Balenciaga. A worthy reinterpretation of Gucci. I don't know what that would even mean because Gucci, there's a Tom Ford strand of Gucci, there's the Alessandro Micheli strand of Gucci. So when you do something that's true to Gucci or in the Gucci spirit, you do have options. That is sort of interesting because I think Demna's an amazing designer.
- [06:34]
Imran Ahmed
Yeah.
- [06:35]
Tim Blanks
And the prospect of him confronting a completely different kind of challenge from the challenge he's been dealing with at Balenciaga or the challenge he made for himself at Balenciaga is exciting. It's exciting to think of a massive talent like that being given a completely new playground. On the other hand, obviously this sort of strange knee jerk reaction of social media is that he's just going to go to Gucci and do Balenciaga at Gucci. Which presumably is why there's 60, whatever you said, 68% of people who responded to your calling, 64%, 64% saying it's a bad idea because they just expecting to Balenciaga at Gucci. I am not expecting to see Balenciaga at Gucci. I mean, what excites me is that I do feel it's going to create a domino effect in fashion. Else, you know, there's obviously there's going to be a position at Balenciaga. Whoever fills that position is going to leave a position open wherever they are. That could be exciting to see what happens in all of those.
- [07:35]
Imran Ahmed
Well, this has been going on, this speculation, change, musical chairs, leadership, upheaval has been going on for some time. So yes, that seems set to continue. I think you've honed in on the very, very important point, which is the success of this new pairing, Gucci and Demna, rests entirely on him moving on from his vetement Balenciaga aesthetic. If Demna, who as you say, is an excellent designer, definitely one of the most talented designers working in our industry. And I mean that not just from a technical and experience standpoint, but also from an understanding culture standpoint, understanding Internet culture standpoint, and also an ability, kind of a proven ability to reinvent and reshape what a brand can stand for. And as you say, unlike some of the other brands in fashion, Gucci isn't really constrained by house codes or, you know, we were talking in our Other podcast about Givenchy and the little black dress and like, the heritage and the, you know, there are houses in fashion which have this, like, very clear set of codes that the designer has to work with, like Chanel and, you know, others. But as you said, Gucci designers historically have just brought whatever it was they wanted to that house. And so Tom Ford's Gucci couldn't have been more different from Alessandro Michele's Gucci. And perhaps Demna's Gucci will be a completely different interpretation. I think it does rest. The success of this pairing does rest on him being able to do something different, because that Balenciaga vetement aesthetic which first emerged on the scene around 2014, has come to the end of its course. The Balenciaga show we saw in Paris the other day kind of underscored that. And so the really big question here is, can Demna do something different?
- [09:46]
Tim Blanks
Now, you talk about Gucci being unconstrained in a way, but I think what constrains Gucci is its size. And so Demna is going from a single digit billion dollar business to a double digit billion dollar business.
- [10:03]
Imran Ahmed
Well, actually, Tim, Gucci has shrunk back. Yes, I know, I know, but your point is well taken. Gucci is currently about four times the size of Balenciaga.
- [10:13]
Tim Blanks
Yeah. In the same way that Michele going from Gucci going from a big business to a much, much smaller business in Valentino, you feel the smaller business is, in a funny way, less constraining than the big business in this case.
- [10:27]
Imran Ahmed
That's a really good point, because whatever Demna does at Gucci has to appeal to a wide audience. And the reason Michele's Gucci worked so well is like, everyone could get into those clothes and there was something for everybody. So part of the success of Demna's Gucci would also depend on him being able to create something for the masses, as it were.
- [10:49]
Tim Blanks
Yeah. And, you know, if you think about how apparently how long this has been in the works, that his last show we saw, the last ready to wear Balenciaga show that he presented this week, the obvious assumption is that is some kind of prelude to what he might do at Gucci, because it was different enough from what he's been doing at Balenciaga to suggest a change of approach, whatever. But the problem is there, if that was a potential prospectus applied to Gucci, the giant Gucci, the sleeping giant Gucci, it didn't strike me as something that would wake Gucci up.
- [11:31]
Imran Ahmed
No. And I don't think it's different enough. Well, I actually, you know, I perceive that show as maybe less a prelude to Gucci and more of a bye bye to Balenciaga. Well, you know, we know that he's going to do a couture show for Balenciaga in July, so that will be his Balenciaga farewell, as it were.
- [11:53]
Tim Blanks
Well, that will be amazing.
- [11:54]
Imran Ahmed
Yeah, it will be amazing. But I saw the Ready to Wear show in Paris. That just happened as more of a denouement.
- [12:04]
Tim Blanks
Ooh, that's dramatic.
- [12:05]
Imran Ahmed
Yeah, well, it was just like, you know, when you walked into one of Demna's Balenciaga shows in the past, there was the production, there was the story, there was the instant visual impact. There were those tunnels, those digital tunnels and the graffiti and the like. You know, there was so much effort that went into the whole spectacle and experience of it. This was literally pipe and drape black curtains, the ones that you would have seen backstage.
- [12:36]
Tim Blanks
Yeah, but it was a maze. That was a mental state rather than the incredible physical state, the incredible physical environment of Balenciaga shows. This felt to me like a mental state, you know, a maze. Get me out of here.
- [12:51]
Imran Ahmed
Get me out of here. I don't know where the industry is going. I don't know where Balenciaga is going.
- [12:55]
Tim Blanks
To take me to Gucci.
- [12:56]
Imran Ahmed
I mean, while it was physically a maze, it just felt like, okay, I'm ready to move on. That's what it felt like to a lot of people. And you know, people, as soon as we were walking out, people were like, wow, do you think that was his last show? Like there was something about it that kind of seemed to signal that obviously at the time we didn't know where he was going. But now in retrospect, it kind of all adds up.
- [13:22]
Tim Blanks
Do you know, it's a funny thing, the world. I can't remember in my life when the world has been in such a state. I'm sure there have been times like that. I'm sure if I was. Yeah, I mean, the Vietnam War or whatever. But I think when you're young, you don't really see things in the same way as you see things when you're much older. And I just look at the world now and I just. It is in such an. All these irreconcilable differences, all these insoluble problems, all of it, all of them, all the human issues taking place under this umbrella of the climate crisis, which is just intensifying, which has now hit this sort of rhythm of its own, the self perpetuating catastrophe. And fashion has Got its knickers and twists about all these, you know, the succession battles and all these incredible leadership struggles and CEO changes and designer changes. You know, when you read the Puck newsletter and you read the coverage of Hollywood, you see it's happening everywhere. Every industry is roiling with whatever's happening and the effect that Donald Trump's had in a very, very short, space of time on absolutely everything but this whole thing. Reading the coverage of Donatella in the paper this morning, it's interesting how fashion can grab the headlines back in her case. It seems like it's quite a human story.
- [14:51]
Imran Ahmed
Yeah. You know, I knew it was a mainstream story when the BBC contacted us yesterday and asked me to comment on Donatella's change. You know, like the kind of generational change that's happening there. Like the family saga, the shift, the passage of time, really. And so, in a way, the Donatella story was the bigger story yesterday because it's the one that has made big global news headlines outside of fashion.
- [15:18]
Tim Blanks
Yeah.
- [15:19]
Imran Ahmed
What are your thoughts on the changes that need to happen at Versace?
- [15:24]
Tim Blanks
She is such a wonderful woman. She's always been one of my joys in all the years I've been working in fashion. She is such a genuine, incredible human being, and I could only wish the very, very best in life for her. And I hope that that's what's coming to her now. I hope she has time to really step back and enjoy the things that she wants to enjoy, the things that she's maybe shelved for the last while, while she had the responsibilities of running the business. But I. How many fashion brands resonate with people who don't know a thing about fashion? I mean, I always use my youngest brother as an example, and he. In days of yore, you could say Armani to him and he'd look at you and he'd say, perfume. Tom Ford? Never heard of him. You know, you could go. You could run down the list of design in that. But he did. Versace was one of the few names that registered with people who didn't know anything about fashion. Just as she read just. She is one of the few fashion. Like Karl Lagerfeld, maybe. How many people can you think of who kind of transcend the boundaries of our industry and make it in the big wide world as a sort of totem? You know, she's a totem.
- [16:38]
Imran Ahmed
And yet that business remains stuck at about a billion dollars in revenue.
- [16:44]
Tim Blanks
Well, billion dollars is a big business. I mean, what's wrong with being a billion dollar business?
- [16:50]
Imran Ahmed
Well, I think what's wrong with it is it's not an independent family company. It was acquired by a big American fashion group that acquired it on the basis that they thought they could double the size of that business and take it to $2 billion. That was the whole investment thesis behind it. And whether we like it or not, it's part of a publicly traded company. And so the expectation was that it had the potential to grow. And for me, there's no doubt that that business, for all the reasons that you mentioned, by the way, that it has such widespread recognition that Donatella became a cultural figure that transcends fashion because it has such iconography and DNA, that position it really, really clearly in the marketplace for all of those reasons, the Versace brand is much bigger than the Versace business. And so there is an opportunity to grow that business while keeping its DNA. There's no doubt about that. You know, like, it's a fraction of the size of some of the other brands. One might think it's as well known as Gucci or as well known as Vuitton. And so it has the potential to grow. And so what's going to be really interesting now, if all of the rumors in the market are accurate, that Prada Group is looking at it and thinking of acquiring it from Capri, that would mean that the new Chief Creative Officer, Dario Vitale, is kind of reunited with his old bosses at Prada because he used to work at Miu Miu, and, you know, with a thoughtful, strategic, inherently Italian approach to fashion, I think there could be a really interesting match up there with the new designer, the new owners, and newfound creative energy.
- [18:32]
Tim Blanks
Obviously, people look at the numbers at Miu Miu while Dario Vitaly was at Miu Miu, and they see a 98% increase in sales in 2024. And you can imagine CEOs everywhere, all around the world is on their hind legs and clapping their flippers with glee about that prospect. But what I find interesting and what I've always found interesting about Versace, and I think Donna Taylor touched on this at points in her tenure, but she was also very, very pragmatic. And, I mean, she realized what there was to exploit in the legacy that her brother left, and she did that so well. But, you know, his own evolution as a designer before he was murdered was towards something that was less about the traditional DNA that people associated with Versace, heading towards something a little more, you know, Helmut Langy, maybe a little more minimal and cool. Wouldn't it be an interesting twist if Dario Vitale coming From Miu Miu elaborated on that. And the things that people associate with Versace, he actually moves the brand in another direction, still using the kind of powerful foundation, but creating something that is a little. I wouldn't say cerebral, but a little more measured, a little more, you know, if you look at the. The miracle that is Mu Mu. The sort of thoughtfulness and the. And the. I know. The accessibility and the.
- [20:07]
Imran Ahmed
There's also the currency. Right. Because although Versace has all of that iconography, it still felt quite nostalgic in terms of the interpretation, especially in recent seasons. So I think what's needed now is like to refract that DNA through a more contemporary lens. And I think given the creative success of Darya Vitaly at Miu Miu, that's what I think they're hoping he can bring. By the way, it will take a lot more than creative overhaul to make that business work. There's a lot of operational marketing, manufacturing, supply chain. There's a lot of other things that are going to have to come together in order to make that business successful. In the same way that Prada 5, 10 years ago was underperforming the rest of the sector because. Not because it lacked creativity, but because it lacked the operational and business discipline that has been slowly put into place over the past five or ten years. I wrote last week in a. In a letter, I think in between 2017 and 2018, it was generating an EBIT profit margin of around 10%, which was way lower than the industry. That profit margin has expanded to almost 24% now. So there's a whole operational and business discipline that will need to happen as well. Combined with his creativity.
- [21:36]
Tim Blanks
Well, imagine if he can generate the kind of creative relevance that Mew Mew enjoys now, and that's creating the demand and they get the supply right, then it's everything that anybody could want. Although. And just. I know we have to finish. But now the speculation game dances around. Who goes to Balenciaga? And I thought it was really interesting yesterday. A few people did point out that Ricardo Tisci wiped his Instagram page yesterday.
- [22:00]
Imran Ahmed
Oh, well, that's interesting.
- [22:01]
Tim Blanks
I don't know what that means. They thought it was significant. I don't know what it means.
- [22:04]
Imran Ahmed
You tell me what it means. I think people on the Internet and increasingly our industry peers, read into everything and love to gossip and speculate. I think the industry is rife with misinformation in a way that's actually becoming really, really unhelpful. Of course people are going to start speculating About Balenciaga. That's the next move. But I think the caring people really focused on this.
- [22:31]
Tim Blanks
Yeah.
- [22:31]
Imran Ahmed
Making this announcement, solving this key issue at their most important brand. And now actually, in hindsight, having appointed Demna at Gucci, they were also, in a way, trying to address a problem at Balenciaga because it had kind of reached the end of its course in terms of Demna's tenure, 10 years, and they needed and. And need to make a change there as well. So it certainly will be interesting, see what happens. All I know, Tim, Fashion month in the fall is going to be the biggest fashion month ever. We have. Let me list them out. We have the debut of Mathieu Blasi at Chanel. We have the debut probably of a new designer at Dior, probably Jonathan Anderson, if all of the market reports are accurate. We have Louise Trotter coming into Bottega Veneta. We'll have Dario Vitale starting at Versace. We'll have maybe Demna's new Gucci if he can scramble to get something together after he finishes.
- [23:33]
Tim Blanks
Simone Bellotti.
- [23:34]
Imran Ahmed
Simone Bellotti at Jill. Sandra. I mean, this is gonna be a fashion month unlike anything.
- [23:41]
Tim Blanks
Loewe.
- [23:42]
Imran Ahmed
Loewe. Exactly. I mean, is that 10, almost 10 new designer brand combinations that will make The Spring, Summer, 26 shows really a season to remember. So I feel so excited.
- [23:58]
Tim Blanks
It's a great season for us to launch our swimwear brand, isn't it?
- [24:01]
Imran Ahmed
What do you mean, Tim? I don't care.
- [24:04]
Tim Blanks
We might as well join the crowd.
- [24:06]
Imran Ahmed
Oh, I see. What you say. The BoF swimwear brand designed by Tim and Imran. Yeah, I'm not sure. But anyway, I'm excited. All of the change is a little overwhelming to digest, but. But I think it's what we need.
- [24:21]
Tim Blanks
Oh, yeah, yeah, yeah, you're absolutely right. And, you know, we could say that everybody wins, you know, end our conversation. Even with the trepidatious market and social media opinion suggesting otherwise, it's going to restore a sense of momentum to an industry which feels very stalled. I just wish there were more of those new names that we love being given opportunities. I mean, we did talk the other day about Duranlantic at Jean Paul Gaultier. Maybe he's another one for the fall. Maybe that'll be another one.
- [24:57]
Imran Ahmed
Maybe. I think he would be amazing for Balenciaga, personally. Just those shapes he does. I think that could be really cool. Now I'm doing whatever I said it all.
- [25:08]
Tim Blanks
Yeah, well, there's a number of people who could be amazing for Balenciaga and A number of people who could be amazing for the jobs that they leave to go to Balenciaga.
- [25:16]
Imran Ahmed
Yeah, well, I'm sure the caring people are already focused on that, but I'm excited. You know, the one thing I think it's really important to underscore is the pressure and expectation that is placed on these creative directors. Now you can just see markets can literally move on the basis of these announcements. The ultimate judgment won't happen until we see what comes down the Runway at Demna's first Gucci show. So I think we need to give Demna and all of these other designers the opportunity to really show. Show what they have in mind, like really put it out there. And that's, that's what this industry should fundamentally be about. And so let's give everyone the space to take the time they need to put their creativity to the test. And let's anticipate and look forward to a fashion month to remember.
- [26:10]
Tim Blanks
Yep. And I promise I won't fall over this time.
- [26:12]
Imran Ahmed
Well, we absolutely need you in good condition for this one, Tim, because it's gonna be impossible to interpret that season without you. So I'm glad you're on the mend. Thanks, Tim.
- [26:26]
Tim Blanks
See you soon.
- [26:27]
Imran Ahmed
The BoF podcast is edited and produced by Olivia Davies and Eric Brea.
- [26:33]
Tim Blanks
Foreign.
- [26:41]
C
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- [27:16]
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