Is Kai Yun Group Thinking About The Future Of Brioni?

According to the world clothing shoes and hats net,

(Kering) the overtaking of the bend has been successfully achieved.

Three years ago, Gucci is now a cash cow of the group. It is a superstar with Saint Laurent.

The relatively small size of Balenciaga, which is comparable to the incandescent light, is a startling optimism for the future.

Of course, Bottega Veneta is still listless, Brioni and the group's "hard luxury".

It's only a show.

Not long ago, opening the cloud to split Puma business, the focus was further focused.

Recently, the 50% equity interest in the sale of Stella McCartney brand has also brought sufficient cash injection, which has increased the financial leverage space for future financing development.

So the question now is, what's next?

Should we sort out some undesirable brands such as Brioni? Should we concentrate on cultivating star brands that can compete with Gucci and Saint Laurent in both the right and the best, such as Balenciaga? Or should we put in new recruits in the brand matrix to balance the current excessive tilt in soft luxury goods?

In training the strength of smaller brands, opening the cloud undoubtedly has a first-class record in the industry.

Not long ago, these relatively small contributions contributed to the most powerful driving force for cloud growth.

For example, Bottega Veneta may be mediocre today, but it is still a model of value creation over the years.

In the case of Bottega Veneta, it may be time to consider changing the leadership team of Bottega Veneta to add strength to the brand.

But reform within a relatively independent brand is not enough to support the momentum of the whole group.

Recently, many people in the industry have heard that Saint Laurent aims to become a brand worth 3 billion euros.

This is not ambitious, though the brand is not far away from the target of 2 billion euros.

Saint Laurent is no doubt an important achievement in opening up the cloud, but any way of holding a "no success or a success" or putting all your eggs in one basket is accompanied by risks, which may eventually come to an ugly end. The cost of failure is extremely high.

It is not reasonable to expect such a method to be effective every time and in every brand. Even if some people think this is worth yearning, the method itself is still doubtful.

Such a method can not act on the same brand repeatedly, because it is also accompanied by the risk of brand dilution.

At the same time, Gucci gets three fire forces from CEO Marco Bizzarri, designer Alessandro Michele and marketing director Jacopo Venturini.

Facing the younger consumer groups, the three people jointly refreshed the aesthetic style, changed the business strategy, reorganized the internal organizational structure of the brand, while ensuring that the impact of the enterprise's profit and earnings was minimized while the intense self subversion was carried out.

The final result is natural to you and me.

Now, Marco Bizzarri is also faced with the task of maintaining such momentum and avoiding the trap of dilution.

The risks here can not be underestimated.

Gucci and wholesaler channels, the sales of the outlets and the underground market are still close, which may be more serious than Louis Vuitton. According to recent media reports, Kai Yun believes that Gucci can replace Louis Vuitton sooner or later.

To achieve this goal, we must not lose the "exclusiveness" of the luxury brand at the same time. It is not easy to achieve this goal.

Luxury itself is such a contradiction: because this exclusivity and sales growth tend to run counter to each other, brands tend to be reduced to their own "slaves".

Nor is Gucci aware of this situation.

For open cloud, to achieve meaningful group level growth, we need more than the common development of our existing brands.

In particular, if the cloud is to be balanced, new brands should be added to the portfolio or a new direction of pformation.

At present, only LVMH has achieved this balance.

Kering is no shortage of hardcore luxury goods, and will definitely make the final decision at some point in the future: continue to do it, try to build these brands in organic ways, and buy new brands at the same time.

Or take a major and dramatic move to develop giants in the hard and luxury sector (for example, merging with the peak group).

No matter which way, there are risks.

So how do we go now? This largely depends on Gucci. Now Gucci has new aesthetics of street decoration style. It seems to be becoming trivial and mediocre and may enter the slow cycle sooner.

To a large extent, it depends on China's "millennial generation" - the most important driving force for the growth of soft luxury goods nowadays.

They buy a lot, but they will start weary of brands faster.

The urgent desire for "new things" is more prominent, which will put pressure on Gucci, because Gucci always represents a new direction of creativity.

The Chinese market is now at the peak of consumer confidence, which in fact has increased the risk.

If Trump continues to exert pressure on China and high consumer confidence will burst, companies such as Kai Yun, whose share prices are more vulnerable to market risks, may only give way to other companies whose traditional reputation is more self defensive.

It will be enough to push ahead with the opening of the cloud, but it is not surprising that investors should turn their attention elsewhere if there is no real development to maintain this momentum.

Luca Solca is head of luxury department of BNP Exane Paribas, Paris securities bank.

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