Clues to Gucci’s strategy in the post-Alessandro Michele era

By

Dominique Muret

Translated by
Nicola Mira

Published
Mar 20, 2023

Alessandro Michele left Gucci in November 2022, after seven years at the helm of the Italian label. Since then, questions are rife about the direction Gucci intends to take under new creative director Sabato De Sarno. The latter comes from Valentino, a label he joined in 2009, to then rise through the ranks until he became fashion director. In an attempt to find clues about the future strategy of Kering’s flagship label, Retviews, the data analysis solution by digital consulting firm Lectra, has examined and compared the recent product and pricing strategies deployed by Gucci and Valentino.

Retviews’s first finding was that the collaborations dropped by Gucci with other labels have been extremely successful, while Valentino is less inclined to embark on this kind of partnership. Gucci has collaborated with The North face and Adidas among others, with very different price positionings. In the collaboration with The North Face, prices were much lower, in an effort to reach a broader consumer base, as the authors of the study suggested.

The other major difference between Gucci and Valentino is the part played by accessories and leather goods. Gucci's product range features a much higher share of accessories, 42%, compared to a 23% share at Valentino. “The growing share of accessories is mainly due to [Gucci’s] extensive jewellery collection. In addition, Alessandro Michele relaunched the beauty division and made inclusivity a priority at Gucci Beauty, resulting in a range of shades designed to fit a variety of skin colours,” noted Retviews by Lectra. Gucci has also been focusing on luggage, and recently opened a first store dedicated to this category in Paris.

However, Gucci’s range includes fewer leather handbags than its competitors. The share accounted for by leather goods within Gucci’s overall range is only 15%, compared to 24% at Valentino, 31% at Prada, and a market average of 28%. The share accounted for by footwear is 13% at Gucci, while it reaches 16% at Valentino.

Not only does Gucci feature fewer leather handbags in its range, but their prices are also lower than its competitors’. Retviews compared the prices of shoulder bags similar to Gucci’s famous GG Marmont model, and the latter always comes out cheaper. It is priced at $2,120 (€1,976) on the European market and $2,730 in China, while Valentino's Roman Stud bag sells at $2,438 (€2,272) in Europe and $3,486 in China, and Prada's System model in Nappa leather is sold in these two markets at $3,392 (€3,162) and $4,620 respectively.

Again, this strategy allows Gucci to aim for a broader consumer target. But at the same time, the luxury label is keen to enhance its brand image, and is already working in this direction. At the presentation of its annual results last month, Kering stated that its goal is to continue to work on and accelerate Gucci’s repositioning into a higher market segment, across all product categories. Leather goods and leather handbags may therefore become more important, slotting themselves into an even more upmarket bracket.

Finally, in terms of style, the collections designed by De Sarno, the first being Spring/Summer 2024, are expected to mark a break from Michele’s flamboyance and eclecticism. As Retviews by Lectra noted in the study, before 2023, “Gucci utilised 23% less neutral colours such as black, grey, beige and white than Valentino.” Retviews also found that “a wide range of colours, graphic prints and maximalist motifs play a major role” in Gucci’s ready-to-wear assortment. “In fact, [Gucci] features on average 95% more extravagant items than Prada and Bottega Veneta, which have opted for a more minimalist, classic approach in their assortment in recent seasons,” said Retviews.

In conclusion, between continuing with collaborations, growing its accessories’ share, and designing more minimalist collections, Gucci has more than one card to play to revitalise itself. As a reminder, Gucci’s 2022 annual result was disappointing, with revenue growing by a paltry 1% in like-for-like terms (and by 8% in published data), to €10.5 billion. In other words, De Sarno has a delicate mission to accomplish, as he will have to contribute “not only his creative vision, but his ability to encompass Gucci's heritage to propel the label into the modernity it needs,” said Kering’s boss François-Henri Pinault in February.