Covid-19: Gucci bling not a good look

Will fashionistas embrace ostentatious outfits and logo-heavy handbags with as much gusto as the coronavirus crisis unfolds?
This is a question that all luxury groups must grapple with. But it’s an especially pertinent one for Gucci, the superstar brand owned by luxury behemoth Kering SA.
Gucci has had nothing short of a miraculous turnaround under creative director Alessandro Michele, who embraced maximalism in everything from shoes to streetwear, setting fashion on a whole new aesthetic course.
Consumers may shy away from the most conspicuous consumption with hospital staff risking their lives on the front lines of the Covid-19 battle. Especially as the pandemic shines a harsh light on how poorly paid
essential workers are,
from nurses to supermarket cashiers, making very showy purchases look out of place. Add in the fact that in leaner times, luxury tends to become more discreet and that’s a worry for those brands that have made the logo, such as Gucci’s double G, a key element of their look.
Kering said Gucci’s sales excluding currency movements, acquisitions and disposals fell by 23.2% in the three months to March 31.
Shares in Kering fell as much as 6.9% on worries that the brand, which has so far proved remarkably resilient, is finally losing momentum.
By contrast, French archrival LVMH, owner of Louis Vuitton and Dior, saw its fashion and leather goods sales in the quarter decline by a better-than-expected 10%.
Gucci has obviously been hurt by the disruption to the Chinese market, where Covid-19 first struck. The brand generates 37% of its sales from Asia, but it is particularly popular in China, with millennials sporting Gucci T-shirts (not always the real thing) and carrying immediately distinctive handbags like the Dionysus with its snake clasp.
Before the outbreak, Kering said Gucci had enjoyed strong demand in all markets, and it faced a difficult comparison with the year earlier period when comparable sales had surged an impressive 20%. The division was also hurt by the temporary closure of its production facilities in Italy, where the pandemic first hit hard in Europe.
There is good news in Chinese shoppers flocking back to their local Gucci stores since they reopened. The brand returned to positive sales growth in China in April, and was leading Kering’s revival there. But as my colleague Nisha Gopalan has noted, the pent up demand unleashed after the lockdown may not last, particularly if the country’s slowing economy starts to affect luxury goods buyers’ spending.

—Bloomberg