Gucci, the Kering-owned luxury brand that accounts for around half of the company’s sales and most of its profit, is awaiting a major refresh as it chases rival LVMH.
Why Gucci’s rebrand matters
Rebrands are difficult for major luxury brands, which trade on and derive their profit from their brand strength. Gucci has perhaps suffered, not from remaining the same, but from changing too much.
Observers are now looking for more consistency from a brand that needs to speak to its traditional customers seeking quiet luxury. Meanwhile, expectations of the new launch at its upcoming runway show at Milan Fashion Week are high, with buyers and investors looking to get excited about the brand again.
The situation
Gucci is preparing to launch its first collection under the new creative director Sabato de Sarno.
Kering’s H1 ‘23 saw only a 2% increase in sales compared to 17% at LVMH, according to the Financial Times. Gucci remains, however, among the biggest in the category with over €10bn in annual sales.
- Analysts speaking to the FT note that its appeal has focused on younger rather than older, wealthier customers. Others note that the brand tied itself strongly to fast-moving trends at a time of quiet luxury.
- Elsewhere, the brand appeared to find itself in a strategic bind (made worse by the pandemic) of focusing on China’s fast-growing luxury market, which struggled to rebound after lockdowns, rather than servicing the American super rich.
Lessons from the WARC archive
Relaunches are difficult because they require a lot of investment and thought. They are beset with risks, not least eroding a brand’s distinctiveness as it chases a fashion that would leave it looking like everybody else.
But the benefits can be enormous. As WARC’s guide to the practice notes, a relaunch can turn a complacent established brand into a challenger, reawaken its connection to its roots and reposition itself among a critical target audience.
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This article first appeared on www.warc.com
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