Dozens of Gucci employees staged a strike on Monday in protest against the fashion house's decision to move its design office from Rome to Milan. While Gucci claims that the relocation will not result in job cuts, a regional labor union has described the move as a "disguised collective redundancy." The CGIL union argues that the relocation is a step towards eventually ceasing all operations in Rome. The union's concerns were further highlighted during the demonstration in Rome, where protesters held up placards with messages criticizing Gucci's decision.
Gucci had reportedly communicated its intention to relocate the design office to unions back in October. This decision affects 153 out of the 219 employees currently based in Rome. However, the CGIL union insists that asking employees to move to Milan, which is approximately 300 miles away, is equivalent to laying them off.
Gucci's spokesperson defended the move, stating that it would allow closer collaboration between the creative director, designers, and the company's strategic functions based in Milan. This, in turn, would facilitate necessary interactions and synergies. Gucci has also mentioned that it is providing economic incentives and support far more favorable than those outlined in the Italian national collective agreement.
The upheaval in Gucci's management began with the departure of creative director Alessandro Michele in 2022. Subsequently, the fashion house's parent company, Kering, made significant changes to its top-level management. The appointment of Sabato De Sarno, previously from Valentino, as the new creative director in January 2023 marked a new direction for Gucci. Moreover, in August, Kering announced the departure of CEO Marco Bizzarri, bringing in Jean-François Palus to take charge.
Kering, which also owns luxury brands such as Yves Saint Laurent, Bottega Veneta, and Balenciaga, tasked Palus with strengthening Gucci's operations and teams to rebuild the Italian brand's influence and momentum. Gucci is Kering's largest brand, accounting for over half of the conglomerate's $22 billion revenue in 2022.
While the luxury goods market experienced significant growth earlier in the year, it cooled off during the latter half of 2023. Reflecting this trend, Kering reported a 9% drop in sales last quarter, underperforming its competitors as consumer appetite for high-end clothing and accessories waned following the peak demand seen immediately after the pandemic.
Under the leadership of Sabato De Sarno, Gucci introduced its "Gucci Ancora" collection in September. The unveiling took place in Milan and was attended by a star-studded audience including Julia Roberts, Ryan Gosling, Jessica Chastain, Kendall Jenner, and Julia Garner. The collection gave a fresh twist to traditional Gucci styles with babydoll dresses, tailored short suits, fringed skirts, hoodies, and bejeweled knitwear showcased on the runway.
As Gucci employees continue their strike, the fashion house faces the challenge of resolving the conflict and finding a solution that satisfies both the employees and the company's strategic goals. The outcome of this dispute will undoubtedly have an impact on Gucci's operations in Rome and its future relationship with its workforce.