If yet another strong quarter of earnings is a strong indicator, Gucci’s cool factor won’t be fizzling anytime soon.
Kering, Gucci’s parent company, reported that in the first quarter of 2017, the brand saw a revenue increase of 48.3 percent, or $1.44 billion, in organic sales — its highest increase in 20 years, calling the growth “outstanding.” This comes after several consecutive quarters of mounting sales under the tutelage of Alessandro Michele, who has been hailed an artistic visionary since joining Gucci in January 2015. In 2016, Gucci’s year-over-year comparable revenue increased by 12.7 percent, with a rise of 21.4 percent in the fourth quarter alone.
As with most success stories, an abundance of good fortune leads to concern of an imminent plateau. However, Jian DeLeon, editorial director at Highsnobiety, said he doesn’t foresee this to be the case with Gucci. The brand has succeeded in selling luxury products in a way that resonates with consumers, including an increasing number of younger shoppers, by speaking their language without dropping its price points, he said.
“What Alessandro has done especially well — and it’s something that’s very important in the modern fashion context — is that’s he’s built a distinctive universe,” DeLeon said. “It’s not about defining a certain aesthetic, but telling a story through retail and campaigns. He’s created this nice romantic vision for the brand to inhabit.”
Gucci has continued to set itself apart in 2017, not only by delivering innovative design, but also by being adventurous in marketing. In March, the brand announced a meme campaign to promote its new line of watches, featuring original imagery created in collaboration with popular meme artists and the owners of Instagram accounts like @beigecardigan.
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While initial reaction to the campaign was mixed — several people took to Twitter to scoff at a seemingly low-brow approach for a luxury brand — its results were strong. According to a report by Dash Hudson, the campaign’s 30 memes reached more than 120 million people, and garnered nearly 2 million likes and 21,000 comments. Its engagement rate was 0.5 percent, a number that may appear small, but is actually higher than Gucci’s average Instagram engagement rate of 0.41 percent.
“What Gucci really does well is that it exists in this paradigm where fashion and luxury pieces can be consumed in the same way that memes are,” DeLeon said. “It’s no longer about defining a certain aesthetic.”
Michele’s world of Gucci is also one that’s increasingly focused on diversity; he continues to position the brand as a standout amid the fashion industry’s slow march to both racial and size equality on the runway. In February, Gucci shared a series of video clips in advance of its pre-fall 2017 campaign called “Soul Scene,” which features all black models. Though some claimed the effort was gimmicky, it still drew buzz and an array of media coverage from publications ranging from BET to The Fader.
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Though Luca Solca, head of luxury goods at BNP Exane Paribas, wrote in a report released on Wednesday that brands like Gucci and Saint Laurent are succeeding with an approach that “consists of sweeping the past to one side and ushering in completely new aesthetics,” others argue that Gucci is in fact doing the opposite.
Malina Sanna, founder and CEO of consumer insights company Spark Ideas, said Gucci has carved a strategy that uses elements of the traditional fashion house, while intermixing it with Michele’s innovative vision. The brand has succeeded in not abandoning its history, in an effort to cultivate a new future, she said.
“[Alessandro] pays homage to the past, while bringing new life to it,” she said. “You’re not just buying the [double G logo] — you’re buying something from his artistic mind that tells us a story about the brand and ties it back to Gucci’s past.”
DeLeon echoed Sanna, and said the brand’s ability to pay homage to its roots while embracing the future is exemplified in its 2016 GucciGhost campaign. When Michele discovered that New York graffiti artist Trevor Andrew was defacing surfaces around the city with the Gucci logo, rather than dismiss it as blatant vandalism, he reached out to Andrew to collaborate on products for a new collection.
Meanwhile, Gucci seems to remain impervious even to recent blips, including claims this week that Michele plagiarized the work of London fashion student Pierre-Louis Auvray on an upcoming alien-centric campaign. Though the claim sparked discussion on social media, Michele spoke out to deny the allegation, claiming that he was inspired by Star Trek and other movies from his childhood, and adding that the student only began sharing the images after Michele had conceptualized the campaign.
Ultimately, Sanna said Gucci has remained a brand that continues to enthrall consumers — a difficult feat for fickle shoppers during a particularly challenging time for luxury retail.
“We talk to women constantly about high-end fashion, and since Alessandro Michele has taken over the line, the look on their face just lights up when they talk about Gucci,” she said. “It’s real visceral desire, different than the way people used to lust after Tom Ford’s work. It’s super joyful and exciting.”
