Luxury Industry Semi Annual Report Ups And Downs Will Further Refine The Layout Of The Chinese Market.

Since the end of July, the major luxury goods groups have released their mid 2018 earnings reports. The ups and downs of high-end fashion brands over the past six months have swept the data.

Big cards catch up with each other, the impact of exchange rate fluctuations

　　 France In July 20th, the Hermes group took the lead in releasing the 2018 financial report. According to the current exchange rate, revenue rose 5% to 2 billion 853 million euros in the first half of the year. Sales increased by 7.2% to 1 billion 460 million euros in the second quarter of June 30th compared with the same period in June 30th, and the sales growth in the first quarter was 11%. Exchange rate fluctuations have a certain impact on data performance. If the exchange rate is calculated at constant exchange rate, the revenue growth in the first half of this year is 11% and the second quarter growth is 12%. Hermes said that exchange rate fluctuations in the first half of the group generated 165 million euros in losses.

Compared with the 11.2% growth in the first half of 2017, the growth rate of Hermes is slowing down, especially for its core business handbags and harnesses. The current sales rate has increased by only 3.6%, which is the lowest in all business sectors.

From the first half of fiscal year data, Gucci, which has been in the limelight in recent years, has significantly surpassed Hermes in terms of revenue. In July 26th, Gucci's parent company opened the cloud group and released its 2018 earnings report. Data show that Gucci's sales rose 44.1% to 3 billion 853 million euros in the first half of this year, 43% higher than that of the same period last year, while operating profit rose 62.1% to 1 billion 470 million euros, operating profit reached a record high of 38.2%, and second quarter sales increased 40% to 1 billion 990 million euros, which has been Gucci's sales growth over 35% six over the past quarter.

except Gucci Taking the lead, other luxury brands of Kai Yun also performed well. According to the constant exchange rate, Eve Szentgrolan's sales increased by 19.7% over the same period last year. However, sales of butterfly family fell by 0.9% compared with the same period last year, of which second quarter sales fell 2.3% compared with the previous year, while sales of other luxury brands increased by 36.5% over the same period last year, mainly benefiting from the accelerated growth of barlicia and Alexander McQueen. Paris family has become the fastest growing brand in the group, with annual sales approaching 1 billion euros.

In the past six months, Kai Yun is actively stripping off other brands of its brand to create a more core luxury group image. Including the January spin off of its German sports brand. Puma Most of the equity was given to shareholders of the company; in March, 50% of the British designer brand Stella McCartney was sold to the designer himself; in April, the last non luxury brand, California outdoor sports brand Volcom, was sold in April, and the shares of the British designer brand Christopher Kane51%, which were planned for June, were sold back to the designer himself.

From the group level, the opening of the cloud is closer to the rival LVMH group, but LVMH is far ahead of diversification. LVMH's more than 70 brands compete directly with the cloud. fashion Besides leather products, it also performs well in watches and jewelry, wine and spirits. Also due to the size of the gap, Kai Yun Group sales in the first half of this year rose 26.8%, still only 6 billion 432 million euros, and the LVMH group announced in July 24th that its 2018 half year fiscal year sales grew 10%, to 21 billion 750 million euros, net profit rose 41%, the first breakthrough of 3 billion euros, reaching 3 billion 292 million euros.

From the brand level, the Gucci goal of Gucci is the leading brand of luxury goods. As we all know, Gucci's turning over began in 2015 to open the incumbent creative director Alessandro Michele. Its romantic retro design style quickly attracted attention and the market demand remained high.

Gucci's rapid growth has brought a lot of pressure to Louis Weedon. While maintaining the brand's luxury and flexibility, Louis Weedon is also trying to spanform. In March 2018, Louis Weedon announced the appointment of Off-White Virgil Abloh, director of street fashion, as the director of men's clothing, and was seen as a major young spanformation.

In response to the trend of youth, Louis Weedon CEO Michael Burke told New York Times in an interview: "from the mid nineteenth Century to the 20s of last century, and now, the brand caters to the new class rather than the old rich class." As for the underlying reason behind Louis Weedon's falling out of touch with young people, perhaps the underlying reason is luxury. market A dramatic change in the pattern.

Exchange rate volatility is also given. LVMH group The group noted that exchange rate fluctuations and trade tariffs remained the biggest threat to the performance in the second half of the year. "In the first half of the year, our brand attractiveness and effective strategy proved to be even more prominent in a depressed monetary environment." Bernard Arnault, chief executive of LVMH group, said in its earnings report that "despite the strong global demand, monetary and geopolitical uncertainties still exist, and in this context, the company will remain vigilant."

On the way to catch up with Louis Weedon on Gucci, there is Chanel, which needs to cross the mountain. In June 21st, the first time in 108 years since its establishment, Chanel announced its earnings report, which was seen as a response to the rumor of the takeover. Data show that in 2017, Chanel's total revenue was $9 billion 620 million, far higher than Hermes's 5 billion 500 million euros and Gucci's 6 billion 211 million euros, and was fully capable of maintaining independence.

Scramble for Chinese market

In the earnings reports of various groups, we can see that Chinese Market Still important. It also promotes the further layout of brands in China.

Jean-Marc Duplaix, chief financial officer of Kai Yun group, said at a conference call after the earnings report: "the strong growth of Gucci's performance is inseparable from the pursuit of Chinese consumers." Last year, China contributed 27% of sales to Kai Yun group, according to the latest analysis of the financial times.

As the flagship brand of Kai Yun group, Gucci is also more subdivided in China. In 2017, Gucci launched online shopping service on China's official website, and launched a small program on WeChat to strengthen digital marketing. In July 1st this year, China's downgrades included clothing Gucci also adjusted the retail price of all retail outlets in mainland China, including the new and classic ones, with an average fall of 5%, in order to further reduce the difference between China and other parts of the world.

LVMH group earnings report shows that Chinese consumers still buy large brands of the group's major brands. In the first half of fiscal year 2018, sales in Asia, excluding Japan, grew by 31% year-on-year, the largest increase in all markets. The group said that all regions recorded double-digit growth in the first half of this year, especially in Asia and the Americas market. The demand growth in the second quarter of China was higher than that in the first quarter, and played a key role in improving the performance.

In the field of online, LVMH group has a bigger game. In early July this year, LVMH group's investment company L Catterton Asia and Jingdong jointly invested $175 million in the Chinese luxury electronics business platform monastery. And after the investment, LVMH group's brand will enter the temple library, and at the same time, cooperate with Jingdong in the supply chain system, flow port, logistics system and so on.

Not only that, in July 20th, Louis Weedon China official website officially launched 12 online shopping services for the whole country. According to Reuters, between 2015 and 2017, Louis Weedon closed nearly 20% of its stores in China, mainly in two or three tier cities. Today, the opening of electricity services to major cities has further complemented the absence of physical stores.

The layout is reasonable. According to McKinsey's report on digital Darwinism in January this year, online luxury sales account for only about 8% of all luxury goods sales, but the market potential is unlimited. By 2025, McKinsey predicts that online personal luxury goods will be sold at least three times to 74 billion euros than the current size of 20 billion euros. The brand that can occupy the online market ahead of time will undoubtedly win the initiative.

For Hermes, the Chinese market is equally important. In an interview with Bloomberg, Axel Dumas, the chief executive of Hermes group, said that the Chinese market has maintained double-digit growth in the past few years.

Hermes is also stepping up the layout of the Chinese market. In January this year, the Landmark Prince s store opened in Hongkong, China, and opened in Changsha store in May. In July, Hermes responded to tariff reductions in China. market Price reduction. As early as last year, Hermes made a more youthful online marketing by setting up WeChat limited time shop.