Gucci'S Momentum Seems To Be Showing Signs Of Weakening In The Global Economic Turmoil.

The global geopolitical economy continues to unrest. Luxury industry is in a critical period of pformation and pformation. After a round of recovery, how to achieve sustainable and stable organic growth of luxury brands has become the most concerned issue for investors.

Bloomberg industry research analysts have taken into account the various sectors of the company's revenue growth, profit margins, market share, liabilities, economic environment and other factors, selected 50 worthy of the attention of enterprises, including the fashion industry has the company's fast selling group, the parent company L Brands and Nike group, Gucci parent Company Kai Yun group has become the only luxury group.

According to the list data, the sales volume of XXX group in the past year was 18 billion 900 million US dollars, and its total assets amounted to US $15 billion 160 million. It is estimated that this group's sales growth will be 8.9% this year and earnings per share is expected to grow 11%. L Brands sales in the past year are US $13 billion, and total assets are about 7 billion 620 million US dollars. This year's sales increase is 2.4% or earnings per share have dropped by 12.5%. The sales of Nike group in the past year are 36 billion 400 million US dollars and total assets are about 22 billion 600 million dollars.

It is noteworthy that, thanks to the strong growth of Gucci, the sales of luxury goods group in the past year is about $17 billion 400 million, and its total assets are about $23 billion 680 million.

According to Peng Bo analysts, this year's sales of luxury goods giants, which have increased by more than 20% for 7 consecutive quarters, are down 4.1%. This is the only luxury group that Peng Bo believes is going to fall this year, but earnings per share will grow by 52.3%.

In fact, as early as last year, people in the industry questioned whether Gucci could lead the open cloud group to continue to lead the way. Whether consumers would be tired of Gucci's highly consistent style and aesthetic will still be the sword of Damour, who hangs on the brand.

Gucci CEO Marco Bizzarri said in a video to employees last year that the slowdown in brand revenue after explosive growth is normal. It is impossible to maintain a 50% to 60% increase in turnover every month.

Nevertheless, in the third quarter of fiscal year 2018, sales of Gucci increased by 35.1% to 2 billion 100 million euros on the basis of the high base of the same period last year, pushing the sales of Open Cloud group up 27.6% to 3 billion 400 million euros, exceeding the market expectations of 3 billion 270 million euros, and sales in the first 9 months rose by 31.5% to 9 billion 526 million euros.

However, Bloomberg analysts' prediction of the sales decline of Kai Yun group is not groundless. Compared with the new measures recently released by rival LVMH, the group seems to be showing signs of abating, which is in sharp contrast to the "aggressive" situation a year ago.

At the beginning of last year, Fran ois-Henri Pinault, chief executive of Kai Yun group, put it to "eliminate" Louis Vuitton, and Marco Bizzarri also said in an interview that it would achieve the target of $10 billion in Gucci sales as soon as possible.

In June last year, Gucci suddenly announced its show in Paris, which was held on the same day with LVMH's Dior, which directly fired the war into LVMH's base area.

In addition to Gucci, Kai Yun group also fostered the two quasi Gucci of Saint Laurent and Balenciaga, and appointed the 33 year old creative director Daniel Lee for Bottega, another group of core brands of the group, in order to make the second tier brand to contribute more sales to the group while avoiding the risk of Gucci disgrace.

The LVMH boss, Bernard Arnault, who is well versed in the rules of the luxury industry, naturally will not let the open cloud group wanton provocation. He once told the foreign media that the competitors such as Kai Yun group had been copying in the past ten years and thought they would not succeed.

After making up their minds to defeat the cloud group's spirit, LVMH's action has also become very decisive and rapid, and has carried out a creative director's shuffling with great efforts. The controversial Street trend opinion leader and Off-White founder Virgil Abloh have attracted the attention of the company. She has also pferred the designer Kim Jones, which is good at giving brand new vitality, to Dior men's clothing, and has given full support to the new innovation director Hedi Slimane's innovative initiatives, trying to use these three trump cards to fight back to open the cloud.

After entering the 2019, LVMH began to intensify its suppression of Kai Yun group. In the past 1 months, there have been many important changes.

First, in December last year, it spent $3 billion 200 million to buy high-end hotel operator Belmond, and announced last week that it acquired a minority stake in New York designer brand Gabriela Hearst, but did not disclose specific paction terms.

In addition, there were also reports last Saturday that LVMH was negotiating with the parent company Off-White New Guards Group Holdings S.p.A for the acquisition.

Up to now, LVMH has not responded to the news.

What is even more surprising is that LVMH is also trying to create a brand new luxury brand by working with Rihanna, a hip hop female singer. This is the second luxury brand launched by the group since its creation of Christian Lacroix in 1987. It is also its first luxury brand launched with female stars.

It is reported that LVMH has attached great importance to the first luxury brand of Rihanna. It began preparations in Paris 6 months ago. It is responsible for the Sidney Toledano, chairman and chief executive of LVMH fashion group, and the deployment of hands and Rihanna from Louis Vuitton and Celine's two most important brand teams.

It is not hard to see that LVMH is accelerating the rewriting of rules in the luxury fashion industry to better compete with Kai Yun group for the young market.

However, some people in the industry pointed out that the above LVMH initiatives proved that they could not ignore the fact that Gucci posed a threat to them.

According to fashion headline monitoring, the average search index of Gucci over the past 12 months is much higher than that of LVMH's core brand Louis Vuitton, and has been named the most popular luxury brand in 2018 with Chanel.

Gucci's brand value increased the most in the 2018 best brand list released by consulting firm Interband, which increased by 30% to $12 billion 900 million compared with 2017.

Marco Bizzarri once said that it was a lucky thing to find Alessandro Michele four years ago and appoint him as brand creative director. Now the world is changing too fast. Sticking to rules is not an option at all. Although the brand is not perfect, he and his team will do their best to improve what they are doing.

In order to maintain the uniqueness of the brand, Marco Bizzarri has begun implementing a new strategic plan, shifting the focus from product creativity and marketing to a more core supply chain.

In order to reduce dependence on leather suppliers and shorten delivery time, Gucci is gradually reducing the number of suppliers of outsourcing leather goods. In addition to building the largest plant Gucci ArtLab, it has acquired 10 leather goods suppliers, and will acquire 10 more in the future. The proportion of leather products produced by outsourcing will drop from 75% to 40%.

Marco Bizzarri also stressed that with the impact of social media, consumers' preferences are hard to understand. The biggest challenge facing brands is how to avoid stagnation and to be satisfied with the current success.

Kai Yun group is confident of the future of Gucci. It believes that Gucci is stronger than ever and is maintaining its unique competitive advantage from all brands.

In order to focus more on luxury goods, Kai Yun group began subtraction. Last year, it has sold Puma, Stella McCartney, Volcom and Christopher Kane brands. In order to extend the freshness of consumers' brand, Kai Wan group did not bet all its bets on Gucci. Apart from the establishment of the "iron triangle" composed of Gucci, Saint Laurent and Balenciaga, it was developing the next "star luxury brand".

Earlier, some sources revealed that Kai Yun group had begun negotiations with the private equity fund Mayhoola of Qatar Royal holding, another Italy luxury brand Valentino parent, or made a purchase of Valentino at the end of last year, although neither side has responded to the news so far, but analysts believe that the conclusion of the paction will help Kai Yun group to further approach LVMH.

According to statistics, Valentino sales increased 5% to 1 billion 160 million euros last year, valuing about 2 billion 500 million euros to 3 billion 500 million euros.

Gucci's strong performance over the past two years reflects the deeper essence of today's luxury fashion industry, that is, business has to be driven by creativity.

However, the economic growth is cyclical. Similarly, the luxury industry is neither LVMH nor Kai Yun group, but must always be vigilant.

When the most important wallet for Chinese luxury consumers is beginning to tighten, the retail environment is becoming more complex, and the market is reassessing the luxury sector, which is considered to be dangerous.

The signs of Gucci slowdown are also reflected in the capital market. Last year, the cumulative growth of Kai Yun group's stock price was 8%, far below the 80% growth in 2017, with a market value of about 51 billion 600 million euros.

On the 12 day of next month, the group will publish the fourth quarter and full year earnings data, which will make LVMH and the industry nervous again.