Why are heads rolling at major fashion companies?

BarcelonaLast week, it was announced that Northern Irish designer Jonathan Anderson, currently creative director of Loewe, is leaving the Spanish-born brand where he has worked for the past 11 years. Although there is no official confirmation about his next destination, many voices suggest it will be one of the major fashion houses: Dior, where Italian Maria Grazia Chiuri remains as artistic director. Both brands belong to the French conglomerate LVMH, which also includes other big names, such as Louis Vuitton and Givenchy, and is a world leader in a sector that also includes the French company Kering, which owns brands such as Gucci, Balenciaga, Saint Laurent, and Alexander McQueen.

This is the latest in a cascade of changes that have taken place in recent months at the sector's leading brands. But what is really happening in the world of fashion? Let's take a look at all the changes that have taken place in recent months and what they mean.

Just before learning of Anderson's decision to leave Loewe, Donatella Versace, creative director and the soul of the brand founded by her brother Gianni (she took over immediately after the murder), announced that she was stepping down after 28 years. In a statement released to the media, Versace said she was "delighted" with the change and assured that with the arrival of young talent, she saw the brand founded by her brother "through fresh eyes." Her replacement will be Dario Vitale, who has been working at the Prada-owned brand Miu Miu, and represents a generational change and a change of style that will take effect in early April. Some interpret this move as a result of Prada's, the historic Milanese fashion house's, desire to buy Versace from its current owner, the Capri Holdings group. After Versace's latest financial results confirmed that the firm continues to suffer losses, analysts believe that the change in creative direction is a way to facilitate Prada's acquisition of the Medusa brand, which would result in the union of two of the most iconic houses in the transalpine country.

A controversial designer

But the movements in the sector do not end there. In February, the creative director of Gucci, Sabato de Sarno, also announced that he was leaving his position, and in early March it was learned that his replacement will be a designer who arouses as much passion as controversy: Demna Gvasalia – publicly known as Demna – who until now was the creative director of Balencia. The change represents a significant change of direction for the historic Italian brand, famous for its classic style and for having dressed the international jet-set and thestar system of Hollywood for decades but has been accumulating losses for years.

The Kering group, owner of Gucci, expects Demna, enfant terrible of the sector, and his group of fans revive the brand's sales, even if this means a change of style. Demna accumulates controversies, such as the campaign in which he photographed children surrounded by stuffed animals with elements of bondage, The suit made only with adhesive tape that Kim Kardashian wore or the pair of destroyed sneakers that cost almost 2,000 euros. According to fashion historian Sílvia Rosés, this move seems like "a desperate solution for a major crisis." "It seems that now what they want is for people to talk about them, even if it's because of controversy, but for them to talk about it, and thus stop the sales slump they're experiencing," says Rosés.

For now, the moves at Gucci don't seem to have pleased investors very much. Kering group shares fell 10% the day the new creative director was announced, and have continued to decline since. The challenge facing Demna is immense: Gucci is four times larger than Balenciaga and has a global audience that will test his ability to win over consumers by surprising them.

These latest changes come after other big names in the sector have also left their positions in recent months. Throughout 2024, such prominent names as Alberta Ferretti, who stepped down as creative director of her own company; Sarah Burton, who moved from Alexander McQueen to Givenchy; Pierpaolo Piccioli, who left Valentino after 25 years; and Hedi Slimane, who left Celine after six years.

A turbulent time

So, what's behind all these changes? Rosés believes that companies in the fashion sector "are panicking because the luxury sector is experiencing a major crisis and sales have plummeted." Those responsible for the major firms "don't know what to do to deal with this crisis, which is why we're seeing such brutal changes in direction."

The sector is facing a sales crisis that is difficult to manage. 2024 has been considered by analysts as theannus horribilis Luxury. According to a report prepared at the end of the year by the strategic consultancy firm Bain & Company, since 2022 the sector has lost 50 million customers, a decline attributed to rising prices, economic uncertainty, and a perception of diminishing value among consumers, especially younger ones. Translated into figures, in 2024 this meant a 2% drop in sales for LVMH, while Kering, on the other hand, experienced a sharper drop of 12%. The economic crisis in China, a key market for the luxury sector, also plays an important role here, as does the loss of customers from more mature markets that have been punished by the continued rise in prices following the pandemic. According to analysts at Bain & Company, "this is the first time the luxury personal goods industry has fallen since the 2008 crisis, with the exception of the year of Covid."

British journalist Jess Cartner-Morley, fashion editor at the newspaper The Guardian, analyzed in a recent article the turbulent times the sector is experiencing and pointed out that Donald Trump's return to the White House has worsened the situation, with a new, much more turbulent global economic climate and more chaotic public discourse. "All of this is translating into a convulsion in positions of power in the fashion world. Boardrooms are getting scared," warns this expert, who says that the slowdown in the fashion sector in general, and especially the luxury sector, threatens to continue growing. In this context, Cartner-Morley points out that "the Trump-led shift toward a culture of rapid movements and abrupt changes is placing the most nonconformist designers in positions of responsibility in companies instead of opting for more secure profiles." All of this is happening in a business environment where firms that were born as family businesses have seen their founders retire or sell their businesses, and new managers who value numbers more than creativity have come in. It remains to be seen whether opting for riskier names will work over time to overcome a crisis that has already claimed its first victims.