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 With traditional fashion shows
cancelled because of the coronavirus pandemic,
designer Alessandro Michele teamed up with U.S.
director Gus Van Sant to shoot a seven-part
miniseries to show off his largely seasonless,
gender-neutral creations.
Gucci is showing the videos as a virtual fashion
film festival, with a new instalment released
daily over the course of this week.
The films, which have a dream-like, retro
quality with vintage cars and juke-boxes, follow
a woman, played by Italian actress Silvia
Calderoni, as she goes about her daily routine
in Rome.
They feature cameo appearances by celebrities
close to the fashion house such as singers
Billie Eilish and Harry Styles - all wearing
Gucci creations, including re-editions of
Michele's designs from his first 2015
collection.
The former One Direction singer has also created
a buzz in the fashion world by appearing on the
cover of a December edition of Vogue, clad in a
Gucci ball gown.
GUCCI WATERSHED
Behind the scenes, luxury industry watchers say
this is a watershed moment for Gucci, the
business that drives the bulk of revenue and
profits at parent Kering, but which has been
losing steam over the past year.
After a nearly fourfold increase in earnings
since Michele took the creative helm, Gucci's
revenues have slowed down, lagging rivals like
LVMH's Louis Vuitton and Hermes. Gucci was the
only fashion brand in Kering's stable to suffer
a sales decline in the third quarter.
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Much of the brand's success up until recently
relied on well-heeled, young Chinese shoppers
travelling to Europe's fashion capitals and
snapping up Michele's quirky, flamboyant
designs.
But with international tourism almost frozen due
to the pandemic, Gucci can no longer rely on
foreign visitors coming to Europe's shopping
streets to boost sales.
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 Consultancy Bain, which
produces closely-followed forecasts for the
luxury industry, said on Wednesday the share of
high-end goods purchases by local clients is
expected to rise to 80-85% of the total this
year from 60% in 2019. Local buyers are still
set to account for 65-70% of luxury shopping in
2025.
Gucci is rejigging its marketing and product
line-up to refocus the label and boost its
appeal among local and older shoppers in Europe
and the United States. The fashion house has,
for example, produced "re-edited" versions of
its classic handbags such as the 1,800-euro
Jackie 1961. People born from
1981 onwards -- Millennials and Generation Z
buyers -- now make up almost 60% of luxury
purchases, Bain said, but brands cannot afford
to neglect the remaining 40%.
That is why on top of tweaking their ranges to
include less trend-driven items, most luxury
labels are directing their customer service to
establish close contact with clients who are not
able to go to the stores themselves.
Gucci is still doing well on many fronts,
including an operating margin of 30% in the
first half of 2020, down from a record high of
40.6% a year earlier but still far exceeding
that of many competitors.
But analysts say there are some signs of
fatigue.
Luca Solca of Bernstein said Gucci's social
media traction, while still high, is
diminishing. It also seems to have more trouble
selling excess inventory at full price.
 "There is no red flag at Gucci, but we see an
opportunity to act now in order to avoid bigger
issues down the road," said Solca in a note.
(Reporting by Silvia Aloisi. Editing by Jane
Merriman)
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