Brand Values and Culture

Two brands grappling with elevating their businesses into the luxury goods sector are Burberry and Gucci. In addition to being hampered by a challenging market environment, a bigger issue for both brands is having to reestablish their respective values and cultures, as diverting from them has led to erosion of brand confidence and desirability. This is why whether you’re an independent brand or international luxury house, communicating your brand values and culture consistently to the public is essential to building trust and loyalty with your audience, which, in turn, can uphold a business in tough times.

Gucci monogram, photo courtesy of Stock Holm / Shutterstock

GUCCI

Gucci, part of the Kering group’s stable of brands, has been singled out by fashion and business press for not orchestrating a faster turnaround post-Alessandro Michele. According to Forbes, in Kering’s latest sales results posting, “Gucci was off 20%, from $5.6 billion (€5.1 billion) last year to $4.4 billion (€4.1 billion).” Furthermore, Gucci was down in all regions except for Japan, which has been a driver of world-wide luxury goods sales due to the weak yen. Gucci’s second-quarter sales results caused financial analysts to downgrade Kering stock from buy to neutral.

However, despite the dismal news, Gucci’s turnaround actually seems to have begun. Beyond the fact that Gucci still is one of the most well-known brands in the world, Kering CEO François-Henri Pinault has stressed in multiple interviews that store inventory is still changing from the carryover styles of Michele’s tenure to those of creative director Sabato de Sarno’s new Gucci Ancora collection. Per Forbes, Gucci Ancora “represented only about 25% of revenue during the second quarter and that the performance of “carryover” merchandise, especially handbags, pulled Gucci results down.”

Having two entirely different product lines in stores is confusing for customers and weakening the brand. However, de Sarno has had to reinvent both the Gucci product line, as well as rebuild the brand’s core values and culture for long-term success – a strategy that takes time to fully resonate with the public. One of his key decisions was to make “Gucci Rosso Ancora” the signature color of the house, drawing inspiration from the elevator interior at the Savoy Hotel where the brand’s founder Guccio Gucci once worked as a porter. He also has reimagined the iconic horsebit detail for a more modern aesthetic. De Sarno has taken steps to elevate all product categories from Michele’s maximalist bohemian style to a timeless and elegant look.

Kering’s overall approach with their star brand involves addressing quality concerns and reestablishing meticulous construction, luxurious materials, and top-tier craftsmanship as essential components of the brand's identity to support its heritage and not chase trends or strive to become something not inherent in the brand’s DNA. It’s in line with the strategy currently in play at Bottega Veneta, another Kering brand, that has seen significant success over the last three years.

Burberry tartan, photo courtesy of Stock Story / Shutterstock

BURBERRY

Burberry, on the other hand, is having an ongoing underperformance problem. The brand just appointed a new CEO last week, Joshua Schulman, who is a former head of Coach and Michael Kors, and the fourth CEO Burberry will have had in 10 years. He is tasked with continuing to push the brand into the luxury goods category.

For anyone needing a refresher course in what has gone wrong at Burberry, it started when former creative director Christopher Bailey was appointed to the additional role of CEO in 2013. While Bailey is credited with transforming the company into a fashion industry digital leader and reinvigorating the brand’s design aesthetic, sales started to decline once he took on the dual roles of CEO and creative director; investors felt Bailey had both too much power and too big a pay package and he eventually left the company in 2018. That opened the door for luxury goods veteran Marco Gobbetti (Celine, Givenchy) to replace Bailey in the CEO position. Gobbetti hired Riccardo Tisci (Givenchy) as creative director, who tried to fuse traditional Burberry icons with his streetwear sensibilities, but that combination never lit fire with the public and the company continued to flag. Next came CEO Jonathan Akeroyd and creative director Daniel Lee (Bottega Veneta), who have been the latest duo in charge of the brand.

The issue for Burberry is despite continuous efforts from investors and the board to expand into the luxury goods sector, each new CEO and creative director combo has interpreted the brand in their own way, ultimately diluting any sense of cohesive brand image. For Schulman, it means he will need to begin with reestablishing the brand’s values and DNA in shoppers’ minds. Because beyond its British heritage, iconic trench coats, and signature tartan, it is uncertain what Burberry stands for or what it brings to the marketplace.

According to the Burberry website, Burberry prides itself on being creatively driven, forward thinking, open and caring, and proud of its heritage. However, these values are not being effectively communicated to consumers; their ad campaigns are generic, the “Classics” clothing line is standard merch (the tartan pieces are fun, but there is no inspiring designs), and the handbags are uninteresting (who is spending nearly $2,000 on a fabric tartan Mini Peg Duffle?).

Neither creativity nor any other brand value is being communicated with this product line, and likewise for their ad campaigns. While creative director Daniel Lee proved himself to be a forward-thinking designer at Bottega Veneta, his collections for Burberry have felt cold and somber. To inject some life into Burberry, it needs an element of British cool, while maintaining Lee’s more fashion-forward and product-focused sensibilities.

Yet all the blame cannot be put on Lee’s shoulders. Clearly even the board didn’t think so, since they replaced former CEO Jonathan Akeroyd with Schulman. For Burberry to succeed, the brand must establish a strong design and marketing connection to its rich heritage and values. It must weave these elements into their campaigns and messaging to truly captivate and resonate with their target audience. Only then can they regain their status as a fashion icon and maintain their loyal customer base.

Gucci boutique photo courtesy of JHVEPhoto; Burberry boutique photo courtesy of Robert Way / both Shutterstock