Monday, 13 November 2017 14:11

ChicGeek Comment Greedy Margins & Brand Blindness

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Bally Gucci Greedy Margins Brand Blindness

At a recent press day, previewing the new SS18 collection from the Swiss brand, Bally, I got thinking about how you can slip between the gap. Bally has followed the Gucci model of Wes Anderson statement pieces in bold colours and look-at-me graphics and slogans. But, Bally’s problem is, it isn’t Gucci, and just doesn’t have the attraction as a “name”- I actually like it more for this reason. Therefore they can’t charge the prices Gucci ask and sell in the volumes too. They also have another issue, well, it’s actually a good thing, they are offering a quality made product. 

Left - Gucci Cruise 18

I’m going to call it out. Gucci isn’t good quality. I like Gucci’s ideas, I just don’t think it’s executed to reflect the prices they charge. I’m not naive, I know luxury goods have huge margins, but there’s margins and then there’s margins. No wonder Gucci’s profits are through the roof, they are making products that aren’t as good as they should be in that price category. 

There’s enough Gucci out there, now, to hear of plenty of quality control issues: shoes than run in the rain, tiger patches on jeans repeatedly fixed, leather belts that feel like a free school belt. It’s not just Gucci doing this, but they’re the label flying high and drawing in the masses. They are also creating complicated product that requires time and a level of expertise to make it well and quickly shows its quality.

Bally Gucci Greedy Margins Brand Blindness

I recently posted a tweet following an article on the Business of Fashion - Interesting @BALENCIAGA has overtaken @gucci on the @lyst of most wanted brands.

The article said  “Balenciaga has stolen Gucci’s crown to become the hottest brand in fashion. According to the latest data analysed by BoF in partnership with search platform Lyst — which tracks 4.5 million data points per hour from over 65 million annual consumers, five million products and 12,000 brands — the Demna Gvasalia-designed brand climbed two places to top the hottest brand ranking in the third quarter of 2017.”

Right - Bally SS18

The feedback on Twitter, from many passionate people, was that they wanted Gucci and couldn’t understand this. It must be wrong. Clearly, Gucci is still in demand and they need to maximise this while they can, but this quality issue will speed up their “hot” lifecycle. People will question what they are paying for and many will feel cheated. The fashion crowd are already over Gucci.

A friend recently had a scarf, retailing, probably, for around £400, and it was so thin, it was clearly nowhere near the best quality scarf of that type. It’s almost laughable, and while people have “Brand Blindness” it’s okay, but you free-fall quickly after without quality. Quality makes people return to a brand.

And, this takes me back to Bally. Currently looking for a new owner, they need to decide whether to offer quality and an acceptable price or chase the higher margins, slash quality and see what happens. They’ll never be a Gucci, but they can clearly maximise sales, but increasing margins like many of its competitors. It'll be interesting to see who the new owner is and which direction they decide to take.

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