Valentino’s dynamic duo — Maria Grazia Chiuri and Pierpaolo Piccioli — helped power the Roman brand past $1 billion in revenues. Now separated, with Chiuri just named Dior’s seventh couturier and Piccioli to pilot Valentino solo, the two Italian designers are to shepherd luxury businesses with combined volumes in excess of $3 billion.
This story first appeared in the July 13, 2016 issue of WWD. Subscribe Today.
Despite meager prospects for the sector, analysts largely applaud the shifts in creative direction at the two fashion houses — with some caveats.
“In a slow-growth market, you need to innovate faster,” said Luca Solca, managing director at Exane BNP Paribas.
While “appointing a new creative director is no guarantee of success,” he noted that “opting for more of the same, by contrast, is a guarantee of irrelevance.”
“The probability of breakthrough innovation with the same designer is low — you need change,” he explained. “Valentino could do with new blockbuster ideas — as studs are starting to run their course.”
Rogerio Fujimori, luxury analyst at Royal Bank of Canada Capital Markets, agreed that designer switches can change the fortunes of a brand.
“For luxury brands facing stalling growth for a prolonged period of time, change is often positive to reinvigorate the brand — as we have seen recently at Gucci,” he said. “But it can also be a risk if changes deviate too much from the brand DNA and end up confusing its core clientele. Conversely, for luxury brands that enjoy strong creative momentum, losing a star name naturally creates risks down the road. Investors naturally favor the continuity of successful creative teams, particularly those with a strong commercial approach.”
Chiuri succeeds Raf Simons as Dior’s artistic director of women’s couture, ready-to-wear and accessories collections, and is to show her first collection on Sept. 30 in Paris for the spring rtw season. Piccioli is to fly solo at Valentino during Paris Fashion Week, ending 17 years of collaboration with Chiuri, the last eight as co-creative director. The Italian designers also worked together at Fendi for 10 years.
Despite the two designers’ symbiotic relationship, few expect Dior and Valentino to start looking alike.
“I do not think so, especially from an image standpoint,” said Floriane de Saint Pierre, who runs a namesake executive search and consulting firm in Paris.
“Dior has the opportunity to grow on Chanel’s footsteps,” added Solca. “Maria Grazia Chiuri was instrumental in boosting another haute couture brand revival.”
De Saint Pierre noted that creative duos are relatively common in fashion, pointing to the likes of Proenza Schouler.
“I think it is the first time a design duo splits with each part becoming the creative director of a house,” she said. While noting that “the remit of their role is significantly different, Pierpaolo has the full responsibility of the creative direction of Valentino for all product categories and visual content.”
Dior, by contrast, has separate creative directors for men’s wear and high jewelry: Kris Van Assche and Victoire de Castellane, respectively.
Still, Dior has suggested Chiuri will have a slightly broader purview than Simons had — impacting store presentation and communications — since she will be completely devoted to the brand. Simons, by contrast, juggled his Paris role with a signature men’s label.
“I strongly believe that the creative leaders we need now are the ones who are able to express the brand ideology within the zeitgeist, mastering its global visual content globally — including the way a brand connects with its audience,” said de Saint Pierre.
Most observers believe Chiuri and Piccioli parted ways in order to challenge themselves after so many years working together.
Milan-based marketing and strategic consultant Armando Mammina doesn’t expect the shake-up to have a major impact on Valentino. The brand’s “romantic soul is probably more in sync with Piccioli’s DNA,” and Mammina believes the designer significantly contributed to the creation of some of the most commercially successful pieces. “I am sure the brand will continue to be profitable and Piccioli’s aesthetic vision will provide the right input.
“As for Dior, it’s all very different, in terms of organization, timing, marketing, trade and merchandising,” he said, underscoring the “difficult pace,” which may have led to Simons’ exit. “Chiuri’s great professionalism will be tested, her aesthetic vision for the brand will have to be clear from the start” and she will be expected to revamp Dior’s accessories division. The challenge, Mammina believes, is “to blend Dior’s great design tradition with a more modern and daring vision that can attract new groups of rich and young consumers, used to Instagram and Snapchat, as Gucci just did.”
Tiziana Cardini, fashion director at La Rinascente, views the changes as “an opportunity for both designers, each with a very strong personality in terms of creativity.” Chiuri will be challenged to become part of “a historical maison with a very strong tradition, and offer a contemporary interpretation,” which will allow her “to change the course” of Dior and improve its financial performance. “She can succeed, she has a very concrete approach, a modern yet feminine design vision, combines art and commerce and she is very good with accessories. Her experience with accessories will benefit Dior, which needs a certain freshness in the category. She is a great choice.”
Also, Cardini noted that Chiuri “is used to working in an atelier” and that “her contemporary luxury is not conceptual, producing desirable things.”
It’s different at Valentino, where “the path has been traced and the image is more compact and consistent from accessories to retail, from style to all aspects of the brand,” said Cardini, who sees “no trouble” going forward. Piccioli has contributed as much as Chiuri to Valentino’s success, she contended. “Each is a very complete designer, with artistic and commercial talent, and I can’t imagine Valentino will be overturned,” she said.
Armando Branchini, deputy chairman of Milan-based InterCorporate, believes Chiuri, of the two, is “the designer who leads. She is more into design planning, while he is more into the development of the ideas.” Leaving Valentino for Dior may allow Chiuri to be in charge of the entire process.
“I can’t say that there is no risk in breaking such a successful partnership as it’s always difficult to know how the creative alchemy works, and who to credit for what,” said Tomaso Galli, founder of JTG Consulting. “But there is risk and opportunity in any high-level appointment.”
Galli said he was “sure” that Sidney Toledano, president and chief executive officer of Christian Dior, “knew what he was doing when he hired” Chiuri, as did Valentino’s ceo Stefano Sassi in appointing Piccioli sole creative director. “For Valentino, though, the risk should be minimized by the fact that Mr. Piccioli knows the brand inside-out, and the company has been working so well with him. All things considered, it looks like both Dior and Valentino are in great hands.”
Gianluca Pacini, equity analyst, branded goods at Intesa SanPaolo, said he expects the effects of the split to be immediately visible starting with the next round of shows. Meanwhile, he sees no speed bump ahead if Valentino’s parent Mayhoola for Investments decides to float part or all of the Italian company. “After all, I believe that a brand is a brand if it survives its founder. Meaning Valentino will go public with or without the young talented designers in question,” he said.
Chiuri arrives at Christian Dior Couture as it weathers a patch of muted growth. Revenues at the fashion house declined 1 percent in its fiscal third quarter, but remained stable on an organic basis, despite lower tourist footfall in Paris and some Asian countries. Sales at the French fashion house tallied 429 million euros, or $473.2 million, in the three months ended March 31.
The house closed out 2015 with revenues of 1.87 billion euros, or $2.08 billion, reflecting a gain of 17.1 percent at actual exchange rates and 7 percent at constant rates.
Piccioli, meanwhile, faces a slowdown from a breakneck pace of growth. First-quarter revenues at Valentino rose 9.4 percent to 256 million euros, or $289.3 million. This compares to a 48 percent leap in revenues for all of 2015. At the time, Sassi said the company expected double-digit growth to continue in 2016.
To be sure, all luxury brands face a challenging climate. In a report released July 11, Barclays cut forecasts for a rash of companies and cited few positive catalysts.
“Europe has slowed materially following the terrorist attacks, the U.S. remains highly promotional, Hong Kong and Macau are still declining double-digits and Japan has also slowed following the currency weakness,” said the bank, which is only bullish on eyewear — notably Luxottica and GrandVision — and activewear “driven by the fashion trends in sneakers together with apparel from Euro 2016.”