Is Gucci Poised For a Comeback?

It’s a good day in the world luxury brands—Gucci has finally made its triumphant return to profitability.

Following four consecutive quarters of slumping sales, Kering SA’s preeminent luxury label swung to 4.6 percent gains in the second quarter, ended June 30, 2015, driven mostly by higher tourist traffic.

A more bullish management says its plans to rejuvenate the brand’s image are finally on track and that its new creative and executive teams are using the improving momentum to drive an ambitious agenda for the second half of the year.

“First and foremost, it’s at Gucci that we were seeking to create a new dynamic,” said Jean-François Palus, director and group managing director at Kering, during the firm’s Q2 conference call on July 27. “All indications are that we are on the right track.”

Here are four reasons the brand might be on the cusp of a major comeback.

Brand Overhaul

Gucci’s new CEO Marco Bizzarri and creative director Alessandro Michele “are not leaving any element unchanged regarding Gucci’s new code across, product, collection, campaigns and all other customer touch points,” said Palus during the conference call.

Omnichannel in Focus

Gucci is launching a new website and has plans to unveil fresh, cutting edge advertising campaigns all in “Gucci’s new spirit.”

“We are turning Gucci into a truly omnichannel organization seamlessly integrating our physical and online presence,” said Palus. “…New advertising campaigns will accompany the upcoming Fall and Cruise collection. The new website will be launched and new packaging will be introduced.”

New Store Concepts

Management will reveal a “refreshed store concept” in the fall 2015 at the Via Montenapoleone store in Milan and gradually interpret that updated aesthetic into all of Gucci’s locations.

Refining Distribution

Kering’s management has also confirmed that Gucci will open fewer retail stores and have fewer conversions of wholesale doors to concessions or directly operated stores.

“We are focusing on providing the best customer experience in Gucci stores, leveraging CRM capabilities and improving sales productivity,” Palus said. “We are turning Gucci into a truly omnichannel organization seamlessly integrating our physical and online presence.”

Management said it will also work with suppliers to improve production and sourcing costs.

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