Gucci’s Creative Chief to Step Down

Alessandro Michele, whose eccentric designs reinvigorated Gucci, is stepping down as creative director of the Italian luxury brand as a period of rapid growth peters out.

Parent company Kering SA said in a statement late Wednesday that Mr. Michele was leaving his post at the fashion house having “played a fundamental part in making the brand what it is today.”

The company said Gucci’s design office would continue to carry the direction of the house forward until a new creative organisation is announced. Mr. Michele is stepping down immediately, a Kering spokesperson said.

Kering didn’t give a reason for Mr. Michele’s departure. In the statement, Mr. Michele said that “there are times when paths part ways because of the different perspectives each one of us may have.”

The departure of Mr. Michele comes as Gucci tries to adopt some subtler designs that endure across fashion seasons.

Since taking the creative lead of Gucci in 2015, Mr. Michele’s flamboyant designs were roundly praised by critics and scooped up by droves of younger shoppers from New York to Beijing, sparking a run of remarkable growth for the brand.

However, in recent years Gucci’s sales growth has lagged behind some major rivals like Louis Vuitton and Dior appeal more to older, wealthier consumers who seek out products that are unlikely to go out of style. That trend was exacerbated by the pandemic because of Gucci’s heavy reliance on tourist shoppers from Asia.

After Mr. Michele’s seven-year stint, Gucci is suffering from brand fatigue, said Bernstein analyst Luca Solca. “It needs to open a new creative chapter,” he said.

Still, the departure of Mr. Michele, 49, marks the end of an era for the industry. When he took the creative director job in 2015 the famous double-GG marque had gone cold after years of over reliance on the logo and over expansion into lower-price bags and accessories.

Mr. Michele, who first joined Gucci in 2002 to design bags, was little-known at the time and his appointment was seen by some analysts as a risk. But the Italian soon rolled out an instantly recognisable look and his use of pop culture logos quickly made his designs a favourite of fashion-savvy Instagram users. Fashion shows became spectacles that generated huge buzz on social media.

Gucci went on a tear, with the brand’s annual revenue more than doubling during Mr. Michele’s first four years to reach €8.3 billion in 2018, currently equivalent to about $8.6 billion.

From 2019, however, growth at Gucci slowed substantially, hurt in part by controversy over a sweater that critics likened to blackface. The pandemic then largely locked down international travel, pressuring the brand’s sales to well-heeled shoppers who splurged abroad.

In the most recent quarter, sales growth at Gucci lagged behind its key competitors while its business in China has yet to rebound.

That is a headache for the parent, Kering, where the Gucci brand accounts for the lion’s share of sales and profit. In June, Kering detailed to investors its strategy for Gucci aimed at sparking the next phase of growth. It recruited a former Tiffany’s executive to run the brand’s Chinese business and named a new executive vice president to oversee merchandising.

Paris-based Kering has in recent years successfully steered its stable of brands to capture the spirit of the times, mixing pop culture with more traditional luxury. Balenciaga has taken the U.S. by storm under the creative direction of Demna, its mononymic Georgian designer, while rising sales at Saint Laurent and Bottega Veneta also have helped the company offset slowing growth at Gucci.

Auto dealers across many parts of the country say electric vehicles are becoming too hard a sell for buyers worried about the range, reliability and price of these models.

When Paul LaRochelle heard Ford Motor was coming out with an electric pickup truck, the dealer was excited about the prospects for his business.

“We thought we could build a million of them and sell them,” said LaRochelle, a vice president at Sheehy Auto Stores, which sells vehicles from a dozen brands in Virginia, Maryland and Washington, D.C.

The reality has been less positive. On Sheehy’s car lots, LaRochelle says there is a six- to 12-month supply of EVs, compared with a month of gasoline-powered vehicles.

With automakers set to release a barrage of new electric models in the coming years, concerns are mounting among auto retailers about whether the technology will have broader appeal given that many customers are still reluctant to make the switch.

Battery-powered models have been piling up on car lots, dealers say, as EV sales growth has slowed in the U.S. this year. Car companies have been offering a combination of discounts and lower interest-rate deals in an effort to juice demand. But it hasn’t been enough, because buyer reticence extends beyond the price tag, dealers say.

“I’m not hearing the consumer confidence in the technology,” said Mary Rice, dealer principal at Toyota of Greensboro in North Carolina. “People aren’t beating down the door to buy these things, and they all have a different excuse why they aren’t buying one.”

Customers cite concerns about vehicles burning through a battery charge faster in cold weather or not being able to travel as far as they expected on a single charge, dealers say. Potential buyers also worry that chargers aren’t as readily accessible as gas stations or might be broken.

Franchise dealerships fear that the push to roll out new models will inundate them with hard-to-sell vehicles. Research firm S&P Global Mobility said there are 56 EV models for sale in the U.S. this year, and the number is expected to nearly double to 100 next year.

“I start to think, you know maybe we should just all pump the brakes a little bit,” Rice said.

A group of dealers expressed their concerns about the government’s role in pushing electric vehicles in a letter last month to President Biden.

A Toyota Motor spokesman said the majority of dealers have become “increasingly more confident in their ability to sell Toyota EV products.”

At Ford, the company’s electric-vehicle sales are rising, including for its F-150 Lightning pickup, but demand isn’t evenly spread across the country, according to a spokesman.

Dealers say that after selling an EV, they sometimes hear complaints about charging and the vehicles not always meeting their advertised range. In some cases, customers seek to return them to the dealer shortly after buying them.

“We have a steady number of clients that have attempted to or flat out returned their car,” said Sheehy’s LaRochelle.

While EVs remain a small but rapidly expanding part of the new-car market, the pace of growth has slowed this year. Electric-vehicle sales increased 48% in the first 11 months, compared with a 69% jump during the same period in 2022, according to Motor Intelligence. Sales remain concentrated in a few states, with California accounting for the largest chunk, S&P Global Mobility data found.

The cooling growth has raised broader questions in the industry about whether car companies face a temporary hurdle or a longer-term demand challenge. Automakers have invested billions of dollars to bring more EV models to the market, and many analysts and car executives say they remain optimistic that sales will continue to expand.

“Although the rate of growth has slowed recently, EV demand is clearly moving in the right direction,” said General Motors Chief Executive Mary Barra on a recent conference call with analysts. A combination of more affordable model options and better charging infrastructure would help encourage more people to buy electric vehicles, she said.

There are also varying views within the dealer community about how quickly buyers will adopt the technology.In hot spots for electric-vehicle demand, such as Los Angeles, dealers say their battery-powered models are some of their top sellers. Those popular EV markets also tend to have more mature public charging networks.

Selling an electric car or truck outside of those demand centres is proving more difficult.

Longtime EV owner Carmella Roehrig thought she was ready to go full-electric and sold her backup gasoline vehicle. But after the 62-year-old North Carolina resident found herself stranded last year in a rural area of South Carolina, she changed her mind. Roehrig’s Tesla Model S got a flat tire, but none of the stores in the area carried tires for a Tesla. She ended up paying a worker at a nearby shop to drive her home.

Roehrig still has her Tesla but bought a pickup truck for long road trips.

Tesla didn’t respond to a request for comment.

“I have these conversations with people who say we’ll all be in EVs in 15 years. I say: ‘I’m not so sure. I’ve tried to do it,’” Roehrig said. “I think you need a gas backup.”

Customers who want to ditch their gas vehicle for environmental reasons are sometimes hesitant, said Mickey Anderson, president of Baxter Auto Group, which owns dealerships in Kansas, Nebraska and Colorado.

“We’re in the Colorado Springs market. If this is your sole mode of transportation, and you’re in a market in extremes of elevation and temperature, the actual range is very limited,” Anderson said. “It makes it extremely impractical.”

Dealers representing around 4,000 stores across the U.S. signed the letter in November addressed to Biden, saying the administration’s proposed auto-emissions regulations designed to promote electric-vehicle sales are unrealistic. The signatories ranged from stores owned by family businesses to publicly held giants such as AutoNation and Lithia Motors.

“Some customers are in the market for electric vehicles, and we are thrilled to sell them. But the majority of customers are simply not ready to make the change,” the letter said.

Some carmakers are pushing back EV-rollout plans. GM said in mid-October that it would delay the opening of an electric pickup plant by a year to late 2025. In response to weaker-than-expected consumer demand, Ford said in late October that it would defer $12 billion of planned spending on electric-vehicle investment.

Since September, dealers on average took more than two months to sell an EV, compared with 40 days for all vehicles, according to car-shopping website Edmunds.

While discounts have helped boost sales of some electric vehicles, they also have led to repercussions for some current owners because it reduces the value of their vehicles, dealers say.

“Most people don’t have the confidence to buy an EV and know what it will be worth in 10-15 years,” said Rice from the Toyota dealership.

It may take some time for the industry to adjust because it is still in an early stage of switching to electric vehicles, Sheehy’s LaRochelle said.

“We’re asking for this market to grow organically,” he said.

Gucci’s Creative Chief to Step Down

Alessandro Michele had reinvigorated storied Italian luxury brand, though a period of rapid growth has since slowed

Concern about electric vehicles’ appeal is mounting as some customers show a reluctance to switch