Most Recent Articles In Designer and Luxury
Latest Designer and Luxury Articles
- DVF Taps Paolo Riva as CEO
- Mulberry Doubles Space in Paris
- Louis Vuitton to Show Cruise at Bob Hope Estate
More Articles By
NEW YORK — Patrizio di Marco, Gucci’s global president and chief executive officer, doesn’t rule out the power of the Americas market.
Far from it. In fact, di Marco, who currently directly oversees the Americas region while the company searches for a new president for Gucci America, said that the region will play a key role in the luxury brand’s future — and Gucci has many strategic plans here.
“Aside from the ups and downs from a macroeconomic point of view that you can always have anywhere, it’s a very strong economy,” di Marco said in an exclusive interview at the Academy Mansion venue here, where the brand presented its resort 2013 offering last week. “It’s a very young country. You have the rise of what we can call the middle class, but also ‘minorities’ who are rising on the social ladder, which makes them consumers of goods in general and especially of luxury goods. It’s an incredibly important market.”
There is also historic significance. North America was the first market Gucci expanded to outside of Italy in 1953, and the brand will celebrate six decades here next year. Beyond history, the Americas represents about 18 percent of Gucci’s total business, or about $750 million.
Di Marco said he doesn’t understand those people who consider America’s luxury potential mature.
“When you have a market with this kind of demographic — young, with a number of cities and markets, and some markets totally intact — I don’t see how you can possibly define it as mature,” he said.
That said, it takes a lot of work to maintain a competitive edge in the crowded luxury space, and in the past few years, Gucci implemented several strategies to better express the core brand values.
Di Marco conceded that Gucci, for a while, put too much emphasis on opening price points here, and didn’t communicate enough its artisanal values — the brand is proudly “Made in Italy” — and social responsibility initiatives, like its programs with UNICEF. “We had to recoup the lost time,” he admitted.
So, Gucci worked to correct this. The company also put much weight behind protecting its intellectual property rights worldwide (winning a trademark infringement lawsuit against Guess Inc. and its footwear licensee, Marc Fisher Footwear, last month). Additionally, the firm implemented a new retail and distribution strategy to boost its directly operated stores to fully control the integrity of the Gucci name.
Worldwide, the brand currently operates 390 directly operated stores, of which 64 are in the Americas. Recently, the company embarked on a mission to overhaul the stores by relocating some, expanding others and rolling out the new interior look conceived with creative director Frida Giannini.
Gucci has also been in talks with its retail partners to convert its wholesale presence into directly operated departments. The strategy kicked off with Saks Fifth Avenue, where the Italian company now operates 38 shops for handbags and ready-to-wear directly (footwear still runs as a wholesale division). Gucci is working closely with Saks to give the shops an integrated feel inside the stores.
“They are our partners and will remain our partners, and not simply be landlords,” di Marco noted. “We don’t want to create a segregated world within department stores. We will keep on working closely with them, but we will run these stores, because it’s essential for us in terms of brand integrity.”
In late October, Gucci will also be strengthening its 10-year old e-commerce business by launching m-commerce.
Di Marco is looking at the segmentation of product categories into freestanding retail as a key vehicle for growth, citing men’s as the most logical first division. “You can go from sportswear to formal to casual and made-to-measure, and that’s just rtw,” he said. “We have something equally rich in shoes and leather goods. We are definitely thinking about men’s-only stores.”
Specific leases for such units have not yet been signed, but di Marco projects 10 such stores in the U.S. within the next three to five years. A dedicated men’s store is slated to open at the JK Iguatemi mall in São Paolo, Brazil, next month.
Freestanding units could also make sense for children’s wear, which launched in 2010.
As far as other markets in the Americas, di Marco cited Brazil as one with significant growth opportunity. By the end of the year, there will be five Gucci stores in Brazil, including one slated to open in Rio de Janeiro in the fall.
“Brazil is enjoying an incredible GDP growth rate,” he said. “You have a number of high net worth individuals, similar to Russia and more than India, which says a lot about how important the market is. I think we’ll have more opportunities there.”
Brazil is not the only market the brand is eyeing for growth. Gucci considers the entire Latin America region as an opportunity alongside the Middle East, India, Russia and the rest of Eastern Europe and existing markets — regardless of the constant barrage of doom and gloom news.
“I’ve been in this industry for 25 years,” di Marco said. “I’ve been around ups and downs, many of which were pretty much shaky — the First Gulf War, SARS, the Second Gulf War, the tragedy of the Twin Towers, 2008. Still, this industry is probably the most resilient. Yes, sometimes you have almost a perfect correlation between the economic downturn and the luxury industry, but much less so than in other industries.”
Asked about the state of the search for a U.S. president (Laura Lendrum left earlier this year), he said that Gucci is currently considering several candidates from both inside and outside the organization, with an announcement expected to be made after the summer, and “definitely within the year.”
“At the same time, I’m not concerned at all about this vacancy because I have a truly fantastic team,” he said.
Di Marco’s criteria for the role is not confined to the fashion and luxury world. “Whoever runs a company of this size and maturity has to be a good coach, a person interacting with people, leading them, but not substituting them,” he said.
On a personal front, di Marco has also had to juggle his professional relationship with Giannini with the personal one the two have shared.
“It’s a mess,” he said, laughing. “No, joking aside, the only true problem is to be good enough — we are getting there, it’s a process — to separate; to go home and really manage to have a part of your life that is truly private, because, inevitably, we are both pretty busy.”
But it does also have its benefits. “Sometimes we have to make decisions and there are certain decisions that can’t wait,” he said. “In terms of velocity and efficiency in making decisions, that’s much better. We can decide ‘like this’ what to do and how to do things, but at the same time we’re very much respectful of each other’s position and confidences.”