Gucci Growth Slows, And Chinese And American Consumers Are Polarized.

The French luxury giant Kering Group released its first quarter 2019 results in April 17th. The report shows that the group's sales volume was 3 billion 785 million euros in the current quarter, up 21.9% from the previous quarter, up 17.5% from the same period last year, and its performance is still strong.

However, the growth of its luxury brand Gucci slowed sharply.

Gucci sales in the first quarter were 2 billion 325 million euros, an increase of 24.6% over the previous year, which is much lower than the 37.9% year-on-year growth in the first quarter of 2018. In addition, the growth of the ring also slowed down, with an increase of 28% in the fourth quarter of last year.

However, this performance is still higher than analysts forecast, the comparable growth of 20% this quarter, maintaining two digit growth for thirteenth consecutive quarters.

Gucci retail business is slowing down in Asia Pacific, Japan, North America and Western Europe.

Despite the most outstanding performance in Asia Pacific region this year, sales grew by 35.3% over the same period last year, but still about 14 percentage points lower than the 49% increase in the same period last year.

The most obvious setbacks were in North America.

North America was the fastest growing regional market for Gucci last year, but sales in the North American market increased by only 5% in the current quarter, down from the 64% year-on-year increase in the same period last year, compared with the same period in.

Kai Yun group pointed out in its earnings report that the North American business suffered mainly because of the fierce competition in the market.

Jean-Marc Duplaix, chief financial officer of Kai Yun group, said in a conference call on Wednesday that a major slowdown in the North American market was mainly due to the downturn in the tourism industry, the fall in consumer confidence and the lag of some styles.

However, he insisted that the slowdown in the US market was caused by the Bale Cola Vago style sweater scandal.

Jean-Marc Duplaix said, "(North American sales slowdown) is caused by various reasons. There is no need to be vigilant at the moment. We have confidence in the three quarter of this year's performance in the North American market."

Kai Yun group also stressed in the earnings report that the growth in the Asia Pacific region still depends on the strong growth of the Chinese market.

The analysis shows that the growth of Gucci in mainland China in the first quarter is very dynamic, because Chinese consumers are spending more on their own in the country, encouraged by government policies, including lowering import tariffs.

Duplaix expects that the Chinese market will account for 35% of the total sales volume of Gucci this year.

"The Chinese market is very keen on brands," he stressed.

Looking at the market performance, the interface fashion sees earnings report, pointing out that Gucci has achieved the following two points.

On the one hand, Gucci ensures that all its products are balanced and dynamic.

For example, Gucci relies on the continuous evolution of head products to cash in while adding new products to seize market opportunities and ignite consumers' desire for brands.

On the other hand, Gucci has successfully implemented the brand strategy, focusing on creating a retail matrix and constantly putting forward new concept of the store.

Author: Huang Shan Shan