Taking It Up a Notch: Gucci's Jumbo Flagship Raises Bar on 5th Ave.

"This store concept will hopefully help take away this idea that we are now a mass-market brand," Giannini added. "This is a new important step that we can bring the brand to a different level."

Lee dismissed the idea of the store as a loss-leader used to market the brand. With 30 percent more space than the old store, there's an opportunity to do strong business. "We'll absolutely be a profitable store," he said. "It should not be seen as a vanity project or marketing tool. Seventy percent of our business comes through our own stores."

Of Gucci's 42 U.S. stores, New York is "the most important store in America," Lee said. "This will be one of the highest-grossing stores in the world." Gucci operates 233 stores worldwide. 

And the brand is arriving here with one of the most anticipated parties of fashion week. Gucci on Wednesday will cohost an event with Madonna at the United Nations to benefit UNICEF and Raising Malawi. There will be performances by Alicia Keys, Timbaland and Rihanna, and the co-chair list includes Drew Barrymore, Salma Hayek, Demi Moore, Gwyneth Paltrow, Sarah Jessica Parker, Téa Leoni and Lucy Liu. For the occasion, Giannini has created special dresses for herself and Madonna, having held meetings with the performer at her home in London.

It made sense for her to hold a major event like this in New York. Giannini, a native of Rome, considers herself a big fan of the city, and has a particular fondness for downtown. When in town, she likes to dine at eateries such as Balthazar, Indochine, Pop Burger and Pastis, and Da Silvano and Bar Pitti particularly in the summertime, and favors Michael's for business lunches, especially since it's just a stone's throw from Gucci's headquarters. "I hear so much about Brooklyn," she said. "I have some friends there and would love to visit them if I have some time."

Conceiving the new flagship allowed her to bring some of New York into the store design. "It's mostly in the open space," she said. "I think of New York, and I think of open spaces. When I first came here 20 years ago, I kept looking up at the buildings, and I'm still awed by the skyline."