I’ll admit that I haven’t been the biggest fan of Gucci for quite some time. I find the current aesthetic of the brand to be incompatible with what I believe a luxury brand should be. To me, it’s juvenile. It has been juvenile ever since Alessandro Michele became the creative director of the brand. What’s worse is that Gucci’s recent success has caused many competing brands to adopt a similar approach.
Of course, Alessandro is a fun-loving Sagittarius magpie and I’m a grouchy, old Capricorn crow. What’s interesting is that Gucci is currently undergoing a transformation behind the scenes to deal with changing trends in consumer spending and the impact of COVID-19 on the luxury-goods business in general.
Gucci is still selling, all things considered. However, tourist traffic is down everywhere, fine department stores are going out of business, and unemployment — especially amongst young people — is soaring.
So what is Gucci doing about that? They’re trying to shrink their footprint by focusing on their own boutiques and a core customer who isn’t an Asian tourist or a kid with too much money.
According to this “Bloomberg” article published a few days ago and picked up by The Business of Fashion, Kering (the parent company of Gucci), is adopting a far more conservative strategy, which makes sense considering that Jupiter, Saturn and Pluto have all been transiting Capricorn throughout the luxury market meltdown.
“Kering’s reliance on Gucci — which represented 60 percent of total revenue last year — has been a major driver of the conglomerate’s success, but the uncertain economic times could play against it. Citigroup analysts led by Thomas Chauvet wrote that they welcomed management’s efforts to ‘tone down’ the often flamboyant aesthetic at the brand to attract older consumers and not just millennials. Organic revenue at Gucci fell 8.9 percent in the quarter, less than the 10 percent drop analysts expected.
Gucci probably suffered more than some of its rivals in Europe because of its exposure to tourism, Chief Financial Officer Jean-Marc Duplaix said during a call with reporters on Thursday. Gucci has had less of a local customer base historically, he said.
While the current environment is ‘uncertain,’ the company remains ‘confident’ of its overall strategy, the CFO said. Kering continues to try to make Gucci more exclusive by reducing its wholesale presence. The goal is for wholesale to represent less than 10 percent of the brand’s revenue, which should happen sometime next year, Duplaix said.”
Seeing the business not only contract, but trying to win back a more-mature, financially-secure customer makes perfect sense in the current astrological climate. It’s interesting to note that the current fortunes of Gucci peaked when expansive Jupiter was transiting the sign, just after Saturn in Sagittarius laid the groundwork for the expansion.
It’s going to be fascinating to watch what happens to the brand now that both Jupiter and Saturn are about to leave the sign of Capricorn simultaneously, just before Christmas. I wonder if post-holiday sales numbers will result in another shift of corporate strategy when we all move from this current Capricorn era into a new age of Aquarius? I wouldn’t be surprised to see a corporate shake-up in late January or early February.
Look at me actually discussing fashion on this fashion blog. Next thing you know, I’ll be trying to get work in the business again . . .