Gucci no longer hesitates

Italian luxury brand Gucci is regaining its good form.

According to Fashion Business News, Italian luxury brand Gucci and British street skateboard brand Palace released an advertising campaign last week, confirming rumors in the market about their collaboration. The series sparked widespread discussion on social media as soon as it was released.

The London street brand Palace, founded in 2009, is considered the only street brand that can compete with the American street brand Supreme. Palace is led by Lev Tanju, Gareth Skewis, and their skateboarding team, Palace Wayward Boys Choir. It has a strong 90s pop culture color and is mainly focused on men’s and genderless street clothing. It has a habit of launching joint jerseys every year, so it is highly sought after by European street skateboard enthusiasts and football fans. Manager Lev Tanju loves British street skateboarding culture and boldly expresses his rejection of American monopoly on the skateboard market.

Unlike the wait of several months between the release and release of the previous co branded series, the release format of Gucci and Palace has adapted to the randomness of street brands. It will be launched simultaneously on the global Gucci Vault website tomorrow, October 21, and will open Gucci Vault physical pop-up stores for sale in cities such as Paris, Milan, and Tokyo for the first time.

Gucci Vault was launched by Gucci in September 2021, similar to an open new e-commerce platform, selling Gucci antique items, co branded capsule series, and other selected works of young designers, spanning the real world and metaverse, aiming to attract the attention of young people by reviewing Gucci’s classic products and highly futuristic concepts and designs.

As the first large-scale collaborative series released by Gucci through Gucci Vault, the collaboration between Gucci and Palace has drawn a clear boundary from the previous collaborations with The North Face, Balenciaga, and adidas.

Firstly, in terms of product design, Palace’s collaboration almost closely aligns with the current trend market and the most authentic preferences of young people.

The series not only retains the classics of both sides, but also integrates current popular elements, strengthening the connection between the series and the market. For example, the Italian football jersey with the GUCCI logo conforms to the current popular Blokecore style, and the brightly colored retro raglan T-shirt and vintage low waisted short skirt also satisfy the current young consumers’ obsession with the Y2K trend of the millennium.

As of now, all commercial models of Palace Gucci have been announced on the official website, covering newly designed vintage products, bags based on the classic Palace Tri Ferg logo, and other items that integrate high-end fashion and street trends. In addition to clothing, this series also features a tripartite collaboration with Italian motorcycle brand Moto Guzzi to create a motorcycle. Palace has also collaborated with Gucci’s classic luggage to create a limited edition of 10 vintage safes worldwide.

Compared to the collaboration series between The North Face, Adidas, and Gucci, the commercial flavor of Palace collaboration is less, and the degree of fusion of the DNA of the two brands is also more surprising. This may be attributed to Gucci’s accumulated influence in street culture in the 1990s. Bootlegging culture and presbyopia worship not only led to a collaboration between black designer Dapper Dan and Gucci’s creative director Alessandro Michele, but also allowed today’s Palace co branded collection to showcase the authentic flavor of vintage vintage clothes like Vintage.

The reason why this co branded series can showcase the most authentic sense of the street is also because it was created by suitable creative talents. The scale of Palace is much smaller than the brands that Gucci has collaborated with in the past, so the talents behind it can be more prominently highlighted. Compared to the commercial cooperation between two giant organizations, this collaboration is closer to the collaborative creation of some creative talents.

As the collaboration between Palace and Gucci marks Palace’s first release of women’s clothing, behind the scenes design guru Gabriel Pluckrose specifically enlisted designer Ashley Williams to inject the most authentic subcultural blood into the collaboration series.

Ashley Williams, a British female designer from the United Arab Emirates, has a personal brand of the same name and has many fans of Asian culture. Her designs are bold in color and have a quaint and quirky style. Her pet printed T-shirts and plush items, born under her command, are loved by celebrities and young women such as Rihanna, ROS É, ROSAL Í A.

Alessandro Michele also commented that “the collaboration between Gucci and Palace was not accidental, it came from the common will of people who share a common language, it came from diversity, it came from the streets, and it is truly meaningful.”.

Fashion East founder Lulu Kennedy, who is regarded as the godmother by emerging fashion talents in Europe, is particularly impressed by this collaboration. It should be noted that the relationship between young fashion talents and luxury brands is always a mix of love and hate, with the latter often criticized for stifling talent’s creativity due to commercial goals. And a collaborative effort that appears to serve commercial purposes can ultimately gain widespread recognition from the creative community, which actually reflects the creative freedom actively provided by capital.

In addition to its outstanding design, the reason why Palace’s collaboration has been able to receive full marketing and channel support from Gucci’s latest project, Gucci Vault, lies in its strategic significance that cannot be underestimated.

From an internal perspective, Palace collaboration may be Gucci’s most influential behavior in the field of street fashion. If the collaboration with The North Face is betting on a relatively niche functional style, the intrusion with Balenciaga is a parallel communication within the high-end fashion industry, and the collaboration with adidas is more of a simple collage game, then only the Palace collaboration can truly fill Gucci’s long-term gap in street fashion, far surpassing other series in industry significance.

For Palace, although the brand is known for its large-scale collaborative projects and seasonal collections, it has collaborated with Calvin Klein, Ended Garments, and New Balance since the beginning of this year. Some of its products have a high premium level in the second-hand market, making them also considered as one of the collaborative targets of turning stones into gold. However, none of these projects are as exciting as Palace Gucci.

For Palace, the collaboration with Gucci was a key turning point for Palace to further tap into the luxury goods industry from the street trend field.

Although it was 5 years later than Louis Vuitton and Supreme’s century long collaboration to break the barriers of luxury and street fashion, it is worth noting that Gucci ultimately established a significant milestone in the fashion industry through its collaboration with Palace, and played a driving role in the continued marriage between the two industries.

Even though the series has not yet been released, the “best of all time” often varies from person to person, but for Gucci, the dividing line imprinted by this Palace collaboration is beyond doubt.

It is a refined exploration of Gucci’s collaborative strategy, a reaffirmation of embracing young people, and a validation of the strategy of using creativity to drive brand growth.

In the past two years, almost no luxury brand has been as enthusiastic about building connections in the fashion industry as Gucci. In addition to launching joint collections with partners such as adidas, Balenciaga, Commerce des Gar ç ons, The North Face, etc., the arrival of the Gucci Vault concept has completely opened up Gucci’s creative door, allowing the brand to not only widely include trendy brands such as Vans and MLB, but also to “tap” into the traditional luggage brand Delvaux under its competitor Lifeng.

The intention of many measures is nothing but to constantly arouse the interest of young consumers in Gucci.

Seven years ago, Gucci gained the love of young consumers with its brand new visual system. Under the leadership of CEO Marco Bizzarri and Creative Director Alessandro Michele, Gucci achieved exponential growth, growing from 3.9 billion euros to today’s 10 billion euros, almost tripling, and profits have also increased nearly fourfold.

In 2021, Gucci’s revenue surged by 30.8% to 9.73 billion euros, basically achieving its target of sales exceeding 10 billion euros in 2021.

Gucci, which has achieved sales of 10 billion euros, is no longer a short-lived dark horse, but has begun to examine itself comprehensively, with the intention of becoming a lasting winner at the top of the luxury brand pyramid.

Currently, young consumers are still a group of people who determine the fate of a brand. But as Gucci’s growth returned from explosive to normalized, and its size expanded from a medium-sized to a giant luxury brand, Gucci began to have a longer-term perspective on the brand’s own development.

Gucci’s current situation determines that the brand’s strategy is more complex. In the latest development plan released by Gucci on the Capital Market Day of Kaiyun Group in June this year, the brand designated a dual pillar medium-term development plan with fashion and eternal products as the core.

According to this strategy, the brand will be composed of two levels: fashion and eternity. The fashion series will focus on creativity and innovation, reaffirming the brand’s fashion authority, while the eternity series will further utilize the brand’s archive to shape a more luxurious and high-end brand image.

In other words, the creative director no longer needs to rigidly integrate business goals into fashion creativity. Through reasonable team restructuring and resource allocation, the brand showcases avant-garde creativity through platforms represented by Gucci Vault, while forming a mature product team to consolidate Gucci’s advantages in the traditional luxury goods field with handbags as the core battlefield.

According to Gucci’s introduction, the brand has newly established the position of Design Studio Director, specifically responsible for supervising the work of the main collection. At the same time, Gucci established an independent organizational structure to support the work of fashion collections and major collections.

In the future, Alessandro Michele will mainly be responsible for creative fashion series centered around fashion shows, while commercial styles related to terminal retail products will be spun off and become the main series for the market. This also means that Alessandro Michele has been relieved of the heavy workload and can fully devote herself to fashion creativity, without having to bear all the pressure of Gucci’s transition to the next step alone. And Gucci’s future no longer needs to be entirely betting on Alessandro Michele’s creative performance.

In the new development landscape, while Gucci must adhere to a strong attraction to young people, it is no longer solely betting on young people. Instead, it allocates appropriate brand resources to different customer groups to achieve balanced development.

This may explain why Palace has jointly decided to release through the Gucci Vault platform. The creativity presented by Gucci Vault undoubtedly represents Alessandro Michele’s more crazy and experimental ideas, thus attracting the attention of young people.

Only by diverting the creativity of young pioneers can Gucci’s main brand move towards higher end through classic and sustainable aesthetics, and establish a firm foothold in the top luxury goods field.

Interestingly, at the end of the joint series trailer, a secretary reported to a doll that resembled the CEO, “Gucci’s sales increased by 17% in the fourth quarter.”. This is undoubtedly a joke. As a small-scale co branded capsule series, Palace Gucci naturally cannot fully shoulder the responsibility of sales.

From a market perspective, 17% is not considered an aggressive target. Taking the internal brand of Kaiyun Group as a reference, Saint Laurent and Bottega Veneta during the transformation period achieved growth of 41% and 18% respectively in the first half of the year.

Taking the latest quarter’s data from LVMH, the largest competitor of the parent company Kaiyun Group, as an example, in the third quarter ending on September 30th, the fashion and leather goods department where Louis Vuitton and Dior are located saw a 22% increase in organic revenue, accelerating from 19% in the second quarter. The performance of single brand representatives Herm è s and Chanel in the first half of the year far exceeded the figure of 17%.

However, it is worth noting that Kaiyun Group planned a conservative and prudent path for Gucci during the Capital Markets Day in June this year, setting a mid-term goal of increasing annual sales to 15 billion euros. This means that from now until 2027, as long as Gucci’s compound annual growth rate is not less than 9%, it is already stable and progressing.

Compared to this, the 17% proposal is a more confident portrayal, especially considering that Gucci only achieved a low single digit growth of 4% in the second quarter of this year. As we approach the release of the third quarter’s answer sheet by Kaiyun, Gucci inadvertently reveals high expected values through the joint series, undoubtedly causing investors in the market to think highly.

In the first commercial, passersby dressed in old-fashioned Gucci suits looked up as if witnessing this vibrant co branded series descend into the world. “THINGS ARE LOOKING UP” is a pun promoting slogan that reflects both brands’ inherent sense of humor and their optimistic expectations for this series.

The trailer showcases a bizarre party, accompanied by the classic rave tracks of the 90s British avant-garde band The Prodigy, where humans and invading aliens indulge in pleasure. This short film pays tribute to the classic scenes from several movies, such as E.T. and Happy All Over the World, arousing people’s initial excitement about fashion and revealing a joyful atmosphere.

From numerous signals, the brand’s optimism has already overflowed. Palace’s collaboration reveals Gucci’s expectation for the brand to achieve performance growth by attracting young consumers driven by the collaboration model.

After a long period of market criticism of Gucci’s aesthetic fatigue, several major creative outputs from Gucci have brought unexpected surprises recently. It can be seen that Gucci, who has found a solution and freed himself from entanglement, has returned to purity in creativity, while Alessandro Michele, who has reduced his burden, quickly unleashed astonishing creative energy.

A few months ago, Gucci took inspiration from the work of legendary director Stanley Kubrick and shot a set of advertising blockbusters for the adidas co branded series, which received unanimous praise from the media and netizens for their high degree of reproduction and adaptation.

Continuing the theme of “Shining Twins”, Gucci spared no effort in investing huge manpower and financial resources to search for 68 pairs of twin models worldwide at this year’s Milan Fashion Week in the spring/summer 2023 collection, bringing a grand Twinsburg show to the world, incorporating discussions about family relationships into the grand narrative of “destiny”, which is touching. In terms of fashion design, the show also showcased a level that amazed industry insiders.

In this collaboration between Palace and Gucci, the brand’s official website prominently reads “Guccier than Gucci” (more Gucci than Gucci). When the tribute to classic movies and the interpretation of the concept of twins cleverly appeared again in the Palace Gucci trailer, Gucci’s artistic sentiment, philosophical spirit, and harmonious fashion atmosphere suddenly came to life, and Gucci also found himself.

This series of highly acclaimed creative achievements proves that creativity is still the valve that opens up the brand’s potential.

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