The Gucci effect: new collections will not be marked down

This week Gucci's creative director Alessandro Michele was honoured at British Fashion Awards with the International Designer of the Year accolade. At the ceremony Michele acknowledged the unorthodoxy of his appointment last January, when the Italian fashion house replaced Frida Giannini with an unknown name: “They had the courage and the foolish act to appoint an unknown guy like me as the creative director of one of the most influential fashion houses in the world,” Michele told the audience. “Over ten thousand thanks,” he added. “One for each Gucci employee all over the world.”

But Gucci, too, is thankful. The house has seen stellar sales and this week the company's chief executive office Marco Bizzarri stated Gucci would not put Michele's first two collections in the end of season markdown.

Gucci, which posted revenues of around 3.5 billion euros, makes most of its profits from accessories and perfumes, as most fashion houses. Michele's ready-to-wear, however, has brought a new customer to its stores, and with his autumn winter 2015 collections only having recently been available, Bizzarri wants to give them as much time at full price on the shopfloor as possible.

The collection will have the longest possible time at full price

“First of all, I wanted to give the collection of Alessandro the longest-possible time at full price in the shop. It’s so new for our company; so new for him,” Bizzarri says, of this break with retail tradition. As the US gears up for Black Friday, fashion houses will markdown their Autumn/Winter collections this week. “I think it’s too early to put them on markdown now. Alessandro’s fashion show collection started arriving in August, so two months and a half later, I didn’t want to do this kind of action now,” he says. Michele’s Autumn/Winter 2015 collection began arriving in stores in June, and early deliveries of Cruise followed in August, three months ahead of the usual seasonal schedule.

According to Bizzarri, discounting the Autumn/Winter 2015 men’s and women’s collections would have little impact on sales: “The full-price sell-through is super high, so even if I put them on sale now, the impact on sales would be tiny,” he says. “The impact on the image would be too big,” he says, emphasising the new interest in Gucci that Michele has stirred up. “We’re seeing a lot of new clients, a lot of new customers — different, younger, more fashion-forward — buying the collection, but not losing the previous ones.”

Sell thrus have been high

So, what will happen to the leftover stock? “Let’s see. We have outlets. We don’t know yet,” says Bizzarri. “What is important to say is that we didn’t buy dramatically high when we bought the collection of Alessandro in the beginning. The full sell-through was very, very high, so we don’t have a lot left, frankly.” The discount strategy for Michele’s first cruise collection, which is beginning to arrive in stores now, will be assessed in June.

As the collections have taken a different turn under its new creative director, the Gucci stores are also getting a makeover. Michele's retail concept has already been adopted in the company's Milan flagship store on Via Montenapoleone, as well as Hong Kong and Seoul. Elsewhere London's Bond Street will be renovated in time for Gucci's Cruise show in the UK.

Having only been appointed this year, Michele's success hasn't seen longevity and if the designer can keep the momentum remains to be seen. “Now, the challenge that we have, the two of us, myself and Alessandro, is to keep on pushing ourselves to innovate as Alessandro innovated at the very beginning, and take risks,” says Bizzarri. “Always try to challenge our team and our people, and we always need to be at the front, at the edge of innovation. Keep on risking. Don’t try to play safe.”

Images: Gucci AW15