Analysis: Gucci vs Balenciaga

It’s no secret that Kering has struck gold by placing Alessandro Michele and Demna Gvasalia as creative directors of Gucci and Balenciaga, respectively. In the space of a few years, the two decaying houses have turned around to be powerhouses. Gucci is arguably the most powerful fashion house at the moment, and Balenciaga made waves earlier this year by announcing its growth outpaced that of Gucci.

So which brand is hotter? That depends what you care about. Here’s a perspective on each:

1. Gucci is hotter

Gucci seems unstopable. Balenciaga may be the fastest growing brand Kering owns, but in 2017 Gucci brought nearly 6x the amount of revenue that Balenciaga did. And don’t let numbers alone guide your view. I’ve yet to see any queue to enter a Balenciaga store — in fact, they are often mostly empty, and I sometimes wonder where exactly people wear Gvasalia’s more outrageous creations (hint: it’s not West London). Meanwhile, the streets of West London are covered in Gucci.

It’s also impossible to get into a Gucci store during the weekend. Here is Gucci on Old Bond Street:

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We tried to go shoe shopping there this weekend and gave up when we saw this.

2. Balenciaga is hotter

Alessandro Michele is a powerhouse unto himself, but Demna Gvasalia holds the #2 and #3 spot on the coolest brands list, and still has room to grow. Remember what happened to Coach, Burberry, you name it — once a logo becomes ubiquitous, it loses its appeal. That’s the dark underbelly of fashion exposing itself. People want what’s cool, and cool is something that not everyone has. It’s ugly, and it’s undemocratic. But when people start lining up to enter a luxury fashion store (unlike in tech: think Apple), that can lead to brand dilution, because in the fashion world, the more people have something, the less people who don’t have it will want it. It’s the simple (if morally troubling) psychology of fashion as access.

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So this line might indicate that Gucci is #1, but also that it has reached its apex. Empires rise, and empires fall.

Now let’s see if Balenciaga can avoid falling prey to its own success.

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