Most Recent Articles In Business Features
Latest Business Features Articles
- PayPal Has ‘Settling-Up’ Option for Group Gift-Giving
- Retail Losses From Out-of-stocks Grow
- Iconix Shares Drop Following Departure of CEO
More Articles By
In its 90-plus-year existence, Gucci has seen quite some change, the most recent one strategically implemented and spearheaded by current president and chief executive officer Patrizio di Marco.
In a candid presentation, di Marco, who joined Gucci in 2009 after an eight-year stint as president and ceo of Bottega Veneta, outlined some of the company’s past transformations, highlighting both the ups and the downs in the brand’s storied history, as he and creative director Frida Giannini work in tandem to keep the label on top today.
This story first appeared in the October 30, 2013 issue of WWD. Subscribe Today.
Part of their plan has been to evolve Gucci from its prior incarnation (and powerful comeback) under Tom Ford and Domenico de Sole. That comeback came after, in the Eighties, the house’s fortunes started to flounder with the proliferation of the famed GG logo invented by Aldo Gucci in the Sixties.
“In Aldo’s intention, the GG pattern had to be the cool, somewhat hip part of the brand offering, just a part of the offer, not the whole brand,” di Marco explained. “Nobody, not even Aldo, could imagine then that the GG pattern was going to become the way the brand would be mostly or only recognized. To some extent the brand fortune and the brand nemesis.”
That point became clear in the Eighties, when Gucci’s fortunes as a luxury house began to suffer.
“The infights and the greed of some of the family members brought the brand away from its core values,” di Marco noted. “There was a push on fabric and GG-pattern Gucci products could be found anywhere. Some of the manufacturing happened outside of Italy to the detriment of the quality and image of the brand. The family crumbled and fell apart, and so did the myth of Gucci.”
Ford and de Sole reinvented the myth with the designer’s iconic fall 1995 collection that heralded a breed of sex and desire.
“All of sudden Gucci was cool, was glam, was sexy, was jet set,” di Marco said. “There’s no doubt that Gucci became the authority in fashion it is still now thanks to Tom’s extraordinary job during the 1990s. However, the message that the brand sent out to the world was one-dimensional: fashion-sexy.”
And that’s although leather goods, the lion’s share of business, were still based strongly on the GG logo — so much so that it provided a risk for the brand’s long-term success. And so executives decided to tap into the house’s heritage.
Di Marco recalled Gucci’s origins almost a century ago when Guccio Gucci, then a porter at The Savoy in London, saw the Beautiful People checking into the hotel with their chic luggage, and dreamed up his own idea of a luxury firm — “The dream of going back to his native Florence, open his atelier and create beautiful products,” he said. “Products that could be respectful of traditions and craftsmanship — products that could be fashionable and yet endure the test of time and last forever.”
Initial attempts to balance fashion and heritage in the post-Tom Ford era were timid. “In fact the company did not have enough confidence to believe that this change was the right one,” di Marco noted. “For sure you could find in Gucci’s showroom beautiful products, exquisite craftsmanship, exotic skins, but all this was nowhere to be found in the most important communication vehicle that a brand-as-retailer has: the stores. On top of that — perhaps because of the pressure to achieve always-greater results — the company started to give more and more emphasis on opening price point and aspirational consumers. The end result was a worsening in the perception of the positioning of the brand. Consumers and opinion formers felt that the brand was trading down. Some even started to believe that Gucci’s products were made in China.”
So, when di Marco joined from Bottega Veneta, the need for change was pressing. “I definitely had a sense of anxiety,” he admitted. “The brand positioning — its perception, the product offering were not that good.
“To make things worse, we were facing the worst economic crisis since the end of World War II,” he added. “And at the same time, consumers had changed, trading excess for excellence and focusing more on discretion and individuality.”
The heritage transformation began with a return to brand values, from Guccio Gucci’s dream to celebrating the artisanal nature and craftsmanship, to house icon Grace Kelly, whose granddaughter, Charlotte Casiraghi, featured prominently in the brand’s ad campaign — drawing an axis between the house’s past and its future.
“Someone said that when you get lost you really begin to understand yourself,” di Marco said. “We were somewhat lost, and we had to find ourselves and our values back. Sometimes the greatest transformation happens when you go back and rediscover who you really are. And for us that meant to go back to the vision, the dream and passion that gave birth to the brand in the first place and restart from that.”
Included in the equation was a distinct Made-in-Italy ethos based on the artisan expertise to punctuate “a brand that is responsible towards the environment and the society we live in. To explain to the world that Gucci is not just about a logo; that Gucci products do not come from a conveyor belt; that we are made nowhere else than in Italy, and that our heritage is not a marketing gimmick but something legitimate.”
Gucci also opened a museum in its hometown of Florence “to honor our city and the history of our craftsmanship,” di Marco said.
Giannini upgraded the product too — reworking house icons such as the Jackie, the Bamboo and the Horse Bit Loafer, for example.
“We knew that some would criticize our going back to the archives as a sign of creative weakness,” he said. “We knew that some would criticize our talking about craftsmanship and heritage as a pure marketing strategy. And most importantly, we knew that to reposition a brand takes time — because you need to change the consumer perception, and that is very difficult after years of erratic positioning. We knew all the challenges. But we also knew that branding is about storytelling, and storytelling is about engaging and touching consumers’ hearts. We are far from having completed our journey. But somehow we have managed to touch the consumers’ hearts and started to change their perception of the Gucci brand.”
Among those initiatives was a major push in corporate social responsibility programs. “We as Gucci have been trying to change a bit the world and to help make it a better place,” he said. “Our CSR approach goes beyond pure compliance and philanthropy. It is an approach that implies a change of the way we do business, from sourcing to the end product.”
This includes seeking an ethical sourcing of raw materials and working toward reducing CO2 emissions by 25 percent.
“Our entire supply chain— that involves about 50,000 people — is certified by the international SA8000 standard,” di Marco said. “That means full compliance with all labor, health, safety and freedom of association laws. Sounds obvious, but trust me, very few companies in this industry are doing this.”
For the past nine years, the company has also had a partnership with Unicef that mostly focuses on children, their health and education, as well as other programs focused entirely on women and girls. In February, Gucci launched the Chime for Change campaign with the goal of raising awareness on issues affecting girls and women, and helping the funding of nonprofit organizations and their programs on health, education and justice.
“Why has a leading luxury brand like Gucci, that is constantly under financial market pressure for results and higher profit, voluntarily decided to embark on a mission that is costly and time consuming?” Di Marco said. “Is this for marketing reasons? Not at all. For sure, in the long term our commitment toward social responsibility will enhance our brand reputation, and eventually consumers will buy more into the brand. But that is in the long term.”
The brand does this for a simple reason — “because it is the right thing to do. It is our ethical obligation,” he noted. “Either you feel this or you don’t. And we as a brand do.”
During the Q&A session, a member of the audience asked the executive to talk about the similarities and differences between his transformation at Gucci and his previous gig at Bottega Veneta.
“There are a number of similarities and some major differences,” di Marco said. “When I took over Bottega, there was no one that could actually spell the name. In America, it was written with three Ts and five Gs, and in Italy, it was mistaken for Bottega Verde, which is actually a fragrance in low-level perfumeries. No one knew anything about the brand.” That was beneficial. “We basically created a myth and legend that was somehow true but wasn’t actually based on many years of history,” he said.
Gucci was a different animal altogether. “You are one of the largest luxury brands in the world,” he said. “You are an incredibly profitable brand.
“When I took over at Gucci, the brand had grown 45 percent over the previous three years, so you basically take over a bullet train, you have to change the engine, you have to keep the bullet train be a bullet train.”
He has clearly enjoyed the ride, and as he put it, “I am not done with Gucci.”