According to an article in the BOF, Gucci is one of the strongest brands in the world. It says that in unprompted brand recognition surveys, where consumers are asked which luxury brands they like to buy, Gucci is regularly in the top three.
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Gucci bags are produced by an Italian fashion and leather goods company which was founded in 1921 by Guccio in Florence but is now part of the French company, Kering. It is the biggest-selling Italian brand and one of the world’s most successful manufacturers of clothing, and high-end leather goods. It is seen as one of the most famous, successful, and easily recognizable fashion brands in the world.
Together with his 3 sons, Guccio expanded the company to include stores in Milan and Rome. These stores featured finely crafted leather accessories such as handbags, shoes, and Guccio's iconic ornamented loafer as well as silks and knitwear in his signature pattern.
During the war Gucci bags were made of cotton canvas rather than leather, but the canvas was noteworthy due to its signature double-G symbol combined with prominent red and green bands. Aldo and Rodolfo Gucci further expanded the company's horizons in 1953 by establishing offices in New York City. There are now over 400 directly operated stores worldwide and as well it wholesales its products through franchisees and upscale department stores.
With beginnings at the end of the 19th century, the brand became one of the world’s most successful manufacturers of high-end leather goods, clothing, and other fashion products. The popularity of the Gucci bags and other merchandise grew during the 50’s and 60’s. Film stars and jet-setters travelling to Italy fell in love with the brand and the name became an international status symbol. And thus, the reputation of this fashion brand grew exponentially and today it is one of the most popular brands which is desired by men and women alike.
However, all made in Italy brands grew at this time and the desire to own an Italian bag grew. You can buy gorgeous Italian bags without having to travel to Italy - Check out our men and women's collections:
However recently, the Gucci brand has been at risk of losing its strong brand position and has been suffering from a decline in sales. Its weakened status as a fashion authority is due to two factors; (1) competition in the luxury market is growing and (2) Gucci has been lacking fresh creative content. Former creative director Frida Giannini was a master at maintaining and even reviving former Gucci icons but she did little to produce a plan for future icons.
It is obvious that to stay relevant, a brand must bring new ideas and styles to marketplace. And that is exactly what new creative director Alessandro Michele has done for Gucci. The second quarter of 2015 saw sales rise by 4.6% beating all expectations.
One problem Gucci has is that its entry-level handbag priced at around $600 to 700 seems to have lost its ‘oomph’ factor. Ill-advisedly Gucci seems to view its logos as a stigma and only uses the logo on bags with lower price points. But despite the fact that consumers at all levels want their branded bags to be recognisable, do they really want a brand logo all over the bag? Many consumers are now saying no to that and would rather resolve their bag fetish with a good quality unbranded Italian leather bag.
Personally I think that a bag with logos drawn all over it is really tacky, and why would I pay all that money to advertise a brand? I think they should pay me to carry their tacky bag! If I cannot afford a high end branded bag which advertises its brand name in a low key dignified way, I would rather not have one. I would much prefer to buy an unbranded designer handbag of similar quality and design for a fraction of the cost than spend my well earned money on a brand logo burdened bag.
So where does this leave Gucci today? Gucci’s third quarter results for 2015, showed only a modest growth. Yet, it still seems to be a bit ahead of its brand competitors. It is anticipated that Michele's influence will improve both organic growth and financial performance as early as next spring.
However while it is anticipated that Gucci’s sales will recover quickly, its profitability may take a little longer. This is because fixing the Gucci brand image will cost. Gucci needs to fix disparities in pricing across regions, the brand’s retail network in China more needs to be spent on communications to support Michele’s new creative vision. But overall the Gucci brand looks like it has a better future and Gucci handbags will remain popular with consumers.
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