Why Is The Luxury Brand Gucci Growing For The First Time In Two Years?

The growth has benefited from the consumption of Chinese tourists to Japan and Western Europe, as well as the support of China's local outlets.

Paris -- benefit from luxury goods

Gucci achieved its first growth in two years, and Kering SA today announced its first half performance over analysts' expectations.

The Paris based company said in a statement issued on Monday's closing of the European stock market, the company's continuing business profits recorded a 5.4% decline of 773 million euros (about 5 billion 335 million yuan).

The median forecast for 19 Bloomberg analysts is 758 million euros.

Gucci's comparable sales grew 4.6% in the second quarter of the fiscal year, beating analysts and giving a 3.2% decline forecast.

This indicates that Gucci has achieved a 7.9% rebound compared with the previous quarter.

Kai Yun group said in February this year that it will help Gucci to grow again through measures such as changing management level, reducing distributors and introducing new products. In 2015, it will be the year when the group's largest luxury brand has changed.

"We are very satisfied with the progress achieved by Gucci," said CEO Francois-Henri Pinault. "In the second half of the year, I have confidence in the ability of the group to combine strict management with the organic growth of every brand."

Jean-Marc Duplaix, chief financial officer, said in a call to reporters that the growth of Gucci has benefited from the consumption of Chinese tourists to Japan and Western Europe, as well as the support of China's local outlets.

In May, in order to clean up the inventory left by the former creative director of the brand, Gucci offered up to 50% discount to Chinese consumers.

The French company sold 40% of its sales last year from Asia and opened up to face Gucci.

A panacea for slowing demand.

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Last week it said it would try to reduce rental costs in Hongkong in response to two years of low sales.

Kai Yun group said its sales in the first half of the year amounted to 5 billion 500 million euros, an increase of 17% over the same period last year, a 3.5% increase compared to the same period last year.