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ENJOY THE RIDE

Gucci’s smart decision to keep store employees in the loop on its outlook

Models wear creations for Gucci's Cruise 2019 fashion collection at the ancient site of Alyscamps in Arles, southern France, Wednesday, May 30, 2018. (AP Photo/Claude Paris)
AP Photo/Claude Paris
Gucci is still on fire, but it’s only getting harder to keep its extraordinary growth rate up.
By Marc Bain
Published Last updated This article is more than 2 years old.

Transparency within a company is linked to employee trust and happiness—which, incidentally, has been linked to higher productivity. In that light, it makes sense that Marco Bizzarri, Gucci’s CEO, would want to keep the company’s retail workers aware of what’s happening with Gucci’s business.

Reuters obtained a copy of a four-minute long video message Bizzarri recorded, telling staff not to worry about any signs of a slowdown or variations in store sales. These, he explained, do not signal a problem.

Right now, Gucci’s sales are excellent. It’s one of the hottest brands in all of fashion—outpacing the industry as a whole—and drawing more and more young shoppers to its intoxicating offbeat chic. But after a stretch of explosive growth through 2017 (revenue rose about 42% over the year before), it’s going to get harder to keep exceeding previous gains by such wide margins.

“We need to recognize the fact that at a certain point we’re going to slow down, we cannot keep on growing 50, 60 percent per month, it’s impossible,” Bizzarri said in the video. He added that employees should “enjoy the ride.”

Business details like these are usually things a company discusses with investors (paywall), not store employees, but the move shows how Gucci recognizes the importance of its in-store staff. Kering, Gucci’s parent company, reported that about 77% of the sales (pdf) at the group’s luxury houses (of which Gucci is the largest) in the first half of 2018 came from directly operated stores. The people staffing those stores—keeping them clean, organized, and inviting—are Gucci’s brand ambassadors throughout the world.

Gucci’s growth has already gone on longer than analysts expected, perhaps giving analysts more reason to believe a slowdown is imminent. There are also concerns that China, the world’s biggest buyer of luxury goods, is seeing its economy start to stall.

So far, though, Gucci hasn’t seen demand decreasing there, and if Bizzarri is concerned, he isn’t letting on. “I am here today to reassure you in the sense that Gucci is stronger than ever,” he said in the video.

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