Luxury legacy

From glitz to gloom at Gucci

Good morning, couture connoisseurs. This is your Stock Market Rundown for March 26th, 2024. Thanks for tuning in once again. Let’s get into it:

TODAY’S TOP STORY: TREND TURNAROUND

The Gucci logo, with its iconic interlocking “G”s, is much-coveted by luxury shoppers—and much knocked-off by counterfeiters trying to piggyback off the brand’s prestige.

The initials stand for Guccio Gucci, the company’s founder, who launched the brand in 1921, selling handcrafted leather purses that delighted the society ladies of Rome and Milan.

Gucci was a pioneer of leveraging celebrities as influencers. In the 1960s, Jackie Kennedy made the brand a household name with the fashion set, thanks to her collection of Gucci handbags. (The company shamelessly exploited this by renaming her favourite style “The Jackie”.) 

But the allure didn’t last. By the 1980s, Guccio’s heirs bastardized the Gucci name, licensing it out to be slapped on mass-produced consumer products. Ballpoint pens and cigarette lighters don’t exactly scream “luxe”. 

With the brand diluted, the business sank into debt, and eventually, the feuding family lost control of the business. Gucci became a subsidiary of a French luxury conglomerate, now known as Kering.

Thanks to some creative help from fashion designer Tom Ford, Kering brought the glamour back to the double-G brand. Today, more than a century after Guccio opened his doors, Gucci has annual revenue of €10 billion. 

But fashion is fickle, and history repeats itself: the brand is again in need of a turnaround. Kering just warned investors that sales at Gucci this quarter will drop around 20%, due to a sluggish luxury market in Asia.

Want to help out, but not willing to pay $3,200 for the Jackie bag? How about a pair of Gucci socks for a mere $220? Yes, they feel pretty much the same as the Hanes socks that cost $10 for six pairs at Walmart… but surely it’s worth the money to have the legendary logo warming your toes.

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SO WHAT ELSE IS GOING ON?
  • Elon Musk is appealing an agreement he made with the SEC that requires him to have a lawyer approve his tweets. Easy fix, just find a lawyer who loves awful puns and dick jokes.

  • Prosecutors say FTX mastermind Sam Bankman-Fried deserves 50 years in prison. He’s going to be pretty bored in there… the jail computers can’t access Coinbase, and the commissary doesn’t accept Bitcoin.

  • Optimus Prime might soon be wearing a Patagonia vest. Paramount, the studio that owns Transformers and other iconic Hollywood franchises, is in play to potentially be acquired by private equity firm Apollo.

  • Chick-fil-A is under fire for using antibiotics in its chicken supply chain, but management says it only uses the drugs "if the animal and those around it become sick." Ew… can I get a sandwich made with a chicken that isn’t sick? Do you have any chickens that do Crossfit and cold plunges?

Thus concludes today's journey, friends. Let’s circle back tomorrow for more nonsense. Yours in capitalism, The Axe

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