Does Gucci have the potential to become bigger than Louis Vuitton? Judgingby its latest sales figures, which surpassed the six billion mark, LVMH maynot hold the crown for long.
No wonder François-Henri Pinault of Gucci parent company Kering told theFinancial Times: “We are only at the beginning”. Due to the spectaculargrowth Gucci achieved in 2017, led by chief operator Marco Bizzarri anddesigner Alessandro Michele, the company has already exceeded the turnoverof Hermès, a brand regarded the as the pinnacle of success of all luxurycompanies. In the world of super brand rankings, Gucci remains only behindthe monogram that is Louis Vuitton.
In the past twelve months, the Florentine fashion house "performed betterthan the market", rose from 4.3 billion in 2016 to 6.21 billion this year,up by 44.6 percent with operating profits of 2.12 billion.
Gucci's operating profits have doubled
Gucci's operating profits have quadrupled in the last 18 months, whilerevenues have more than tripled. This has led analysts and investors towonder how long the brand can sustain these levels of growth, writes theFinancial Times. According to Pinault, over time Gucci could surpass thesales of Vuitton.
The biggest "Gucci on record" (the Italian press has often compared itsgrowth to that of Apple in the era Steve Jobs) has meanwhile overtookanother leading name of luxury, the French Hermès, which ended 2017 withsales growing 7 percent 5.45 bn euros. The brand has seen its grown'limited' to a single digit increase unlike its double digit growth in2016.
One reason Gucci has seen its sales surge is due to its growing onlinepresence. Gucci saw its web traffic increase from 1.8M site visits inJanuary ‘17 to 4.2M visits in December ‘17 – a 130 percent increase in webtraffic, notes Forbes.
Gucci has already surpassed Louis Vuitton in online traffic, even if sitevisits do not necessarily mean conversions. According to Forbes, inDecember 2017 SimilarWeb tracked 4.2 million US visitors to Gucci.com, ascompared with 2.9 million for LouisVuitton.com.
Interestingly, Gucci was named one of the three 2017 Momentum Awardwinners by SimilarWeb in the retail category, the only luxury brand to beso recognized. Gucci joins Uniqlo.com and Stitchfix.com as leaders in theonline world of retail, based on the company’s algorithm measuring onlinetraffic and engagement metrics.
Photo credit: Gucci, source: Gucci website; article sources; Forbes,SimilarWeb
As an enthusiast deeply immersed in the realm of luxury fashion and business, my comprehensive knowledge extends beyond the surface of trends and headlines. My expertise delves into the intricate dynamics of the industry, analyzing market trends, financial data, and the strategic maneuvers of key players. This isn't just an interest—it's a passion backed by a thorough understanding of the subject matter.
Now, let's dissect the article on Gucci's potential to surpass Louis Vuitton, supported by the latest sales figures and strategic moves in the luxury fashion landscape.
Gucci's Spectacular Growth:
The article underscores Gucci's remarkable growth under the leadership of chief operator Marco Bizzarri and designer Alessandro Michele. In 2017, Gucci exceeded the turnover of Hermès, traditionally considered a pinnacle of success in luxury. The company's sales figures surged from 4.3 billion in 2016 to an impressive 6.21 billion in the past twelve months, marking a substantial 44.6 percent increase.
Financial Strength:
Gucci's financial strength is evident in its operating profits, which have not only doubled but quadrupled in the last 18 months. The operating profits stand at an impressive 2.12 billion. This robust financial performance prompts analysts and investors to ponder the sustainability of such growth levels.
Online Presence as a Catalyst:
A key factor driving Gucci's success is its burgeoning online presence. Gucci's web traffic soared from 1.8 million site visits in January 2017 to an astounding 4.2 million visits in December 2017—an impressive 130 percent increase. This growth in online engagement reflects the brand's adaptability to evolving consumer preferences.
Surpassing Louis Vuitton:
Gucci's prowess isn't confined to brick-and-mortar success; it has transcended into the digital realm. Gucci has not only surpassed the revered Hermès but has also outperformed Louis Vuitton in online traffic. In December 2017, Gucci.com recorded 4.2 million US visitors compared to 2.9 million for LouisVuitton.com, according to SimilarWeb.
Recognition and Awards:
Gucci's online achievements have not gone unnoticed. The brand was recognized as one of the three 2017 Momentum Award winners by SimilarWeb in the retail category. This accolade places Gucci alongside digital retail leaders such as Uniqlo.com and Stitchfix.com, showcasing its prowess in navigating the online landscape.
Future Prospects:
François-Henri Pinault of Gucci's parent company, Kering, asserts that "We are only at the beginning," hinting at the brand's optimism and potential for further growth. The article speculates on the possibility of Gucci surpassing the sales of Louis Vuitton in the future, indicating a shift in the hierarchy of luxury brands.
In conclusion, Gucci's ascent in the luxury fashion industry is not merely a transient trend but a strategic and financial triumph supported by tangible evidence such as sales figures, online engagement metrics, and industry accolades. The brand's trajectory suggests that it is well-poised to challenge and potentially surpass its competitors, heralding a new era in the world of luxury fashion.
