Is Gucci’s Brand Fading Away?


Gucci, the iconic Italian brand founded by Guccio Gucci in 1921 suffers as growth is disrupted.

Over the years, luxury brand Gucci has battled for its place amongst exclusive top sellers. However, this year according to the Wall Street Journal, third-quarter sales are down 1.6% compared to last year. Other brands, Louis Vuitton and Prada have similar trends

By 1953, Gucci’s first over-sea store had opened. The brand attracted exclusive customers such as Audrey Hepburn by offering soft, pure leather handbags and loafers. However, in the 1980s the brand attempted to diversify, creating a range of products from key rings and mugs to exclusive leather handbags. Unfortunately, product diversity meant that the brand became ‘cheapened’ and exclusive products were no longer desirable. This process left the company close to bankruptcy.

Thankfully, in the 1990s Domenico De Sole and Tom Ford swept in to save the day and they transformed Gucci’s sorry state by harnessing the power of celebrity icons and sex persuasion. This move lead sales back to glory and the brand re-entered the exclusive list of top fashion labels by the mid-90s.

Gucci rapidly expanded by tenfold between 1991 and 2004. However, it seems that the brand did not learn from the fatal mistakes of the 80s. Indeed, the two concepts: exclusivity and high availability are not compatible in the fashion climate and their co-existence naturally leads to a decline in brand desirability.

In the past 5 years we have seen the opening of over 200 stores and the lower entry-level priced bags at 500 made up 32% of sales. It does not come as a surprise to learn that in the past year sales have dropped by 4.5 %. The sales focus on the lower-end quality product and the vast availability of such merchandise inevitably shifts brand appearance from high-end exclusivity to cheapened availability.

Gucci’s over-use of their logo also jeopardised the brands appeal. Close to all products boastfully bore the Gucci logo. This, combined with an emphasis on low-entry priced product, meant that the iconic name, Gucci, became endangered. The Wall Street Journal cites Mr. di Marco, elected CEO of Gucci in 2008: “If you use the logo as if it were the only thing you’ve got, it’s wrong”.

So what does this now mean for our beloved luxury brand? Mr. di Marco decided to rid of Gucci’s over reliance on logos, from featuring on 90% of products to 37%. Mid-range prices have been pushed up and entry-level prices now make up only a small fraction of sales. Lets hope that Mr. di Marco’s new strategies for the brand will end Gucci’s up hill struggle for a steady place on the exclusive list. We shall just have to wait and see.