A Good Card Is Bad, Dugbana Loses The Luxury Label.

At the end of August 2019, Italy luxury brand D&G (dujibana) released its financial report. As at the end of March this year, the total revenue of D&G 2018 fiscal year was 1 billion 380 million euros, of which Asia Pacific market share, including China, decreased from 25% in the previous year to 22%. D&G expects sales in the Chinese market in fiscal 2020 will continue to decline.

Once upon a time, D&G founder Stefano Gabbana also confidently believed in the social network that "the brand loses the Chinese market can still develop very well". Today, the data gives him a powerful counterattack.

The bad news that followed

"The current global trade situation is tense, and China's economy is also slowing down. All these factors will have a certain impact on the future performance of the brand." D&G explains why he failed in his earnings report. D&G avoided the trust crisis in November last year.

In November 2018, on suspicion of race and sex discrimination, D&G's propaganda video "chopsticks eating" triggered strong protests in social media. D&G is not only forced to temporarily cancel the long-awaited Shanghai show, but has also been boycotted by Chinese consumers and cooperative e-commerce platforms.

According to the financial report, in the 2018 fiscal year ending March 31, 2019, D&G's EBITDA (profit before depreciation and amortization) dropped 40% to 87 million 200 thousand euros, and its profit margin dropped from 12.2% last year to 6.3%.

From the regional point of view, the proportion of total sales in Asia Pacific region decreased from 25% in the same period last year to 22%. Sales in the Americas accounted for 16% of total sales, compared with 13% in the same period last year, and sales in Italy's domestic market accounted for 23% of total sales. Although sales in this fiscal year will increase, the group's expenditure now accounts for about 60% of total sales, and its profitability is still poor. In this regard, D&G said that the good momentum of autumn and winter new retail sales may improve the performance in the second half of the year, better than expected.

Outside analysis, D&G in recent years in the luxury market situation is worrying, it is losing the position of the first tier of global luxury brands.

In the list of the most valuable Italy brand 50 in 2017, BrandFinance, the famous British brand assessment agency, only had thirty-fourth in its list, and it was not listed in its list of the ten largest luxury brands in 2017. In the 12 months ended March 31st this year, the income of the brand was basically unchanged from the previous year, and it recorded 1 billion 290 million euros, and the profit before interest tax depreciation and amortization fell 7.1% to 156 million euros.

It is also reported that in 2019, there was no famous star wearing D&G at the Golden Globe Awards and the Oscar awards evening. In March 2019, Broadcasting British Corporation (BBC) said that in the list of billionaires released by Forbes, the two founders of D&G (Domenico Dolce) and Stefano Gabbana (Stefano Gabbana) dropped out of the list, and their social value shrank by 3 billion yuan. (Broadcasting British Corporation)

D&G or lose "luxury" label

Forbes's website, referring to D&G advertising insult China, said, "in any consumption category, the cost of violating consumer trust is not equal to that of luxury goods industry. The high value of luxury brands lies mainly in its reputation. If a brand tarnish this reputation, it will have the real danger of losing its luxury.

El Beth, brand appraiser of Kantar, a British data analysis consultancy, also believes that "influencer economy" has strong influence and increasingly demands brands to embody their values. Chinese buyers are more proud of the prosperity of their motherland, which requires that the brand should not at least be hostile to China's values.

Chinese consumers have long been one of the most important forces in the luxury market. McKinsey's latest report shows that Chinese luxury consumers spend more than 500 billion yuan per year, accounting for nearly 1/3 of the global luxury goods market.

9 months after the incident of insulting China, in August 7th, on the seventh day of Valentine's day in China, D&G released a message entitled "thousand expressions, love is the only one" in its official WeChat public address. The content is only a moving picture. The picture is written by "love" written in many languages. Finally, the picture is fixed on the blessing of Tanabata. This is believed to be the first low voice after D&G's silence for 9 months.

Compared with most other luxury brands and fashion brands, the D&G seems quite restrained and cautious. Most brands will launch holiday qualifying products on the occasion, and push the direction of product promotion. There is no shadow of any product in the D&G push. Some netizens claim that the whole push is a feeling of "please" and "test".

In recent years, the design of D&G has been criticized by the fashion industry as "immutable". But relying on a strong marketing strategy, it has made good commercial returns by inviting celebrities to show the millennials and carry out a radical transformation. In fact, the brand has been controversial ever since its establishment.

In 1985, the D&G brand was founded, and the first men's wear series was launched in five years. Because of its distinctive color and individuality, it is loved by the new rich class. After 33 years of establishment, D&G ranks among the luxury brands. It is also one of the ten largest fashion groups in Italy, and is well liked by the affluent world.

But as the famous saying in the fashion industry, "designer brands are often short-lived, and luxury brands need time to precipitate", D&G's two designers are known for their "mouths". They laugh at obese people in social media, abusing Elton John as a fascist, and speaking in an interview with Washington Post, "I'm not afraid of what I love, I'm not afraid of what I say," Elton John said.