Gucci: Revenue is only half of LV's power channel

As China's oldest luxury brand, LV and Gucci have been http://www.aliyun.com/zixun/aggregation/7785.html in nurturing China's ">" Luxury market. More than 10 years of hard work in the Chinese market have made them the most familiar luxury representatives.

However, with the global economic downturn and the influx of Up-and-comer to China, LV and Gucci also show the "senile" side, in the first-tier cities, they are facing the embarrassing position of "Fall out of favour".

According to the 2012 quarterly bulletin, which showed that Gucci's sales rose by 12%, 10% and 7% on a year-on-year basis in the first and two or three quarters of the year, while LVMH's fashion and leather sector (of which about 75% per cent contributed by Louis Vuitton) increased quarterly sales of 12%, 8% and 5%, All showed a gradual downward trend. Although both have grown slightly in the quarter, the performance of the year has been difficult.

The LVMH group and the PPR Group, where the LV is located, have always been rivals, and competition between the two pillars of the group is inevitable. Moreover, both are based on leather products, only to extend to the garments, product coincidence rate is very high. In the last decade of the global market enclosure movement, both LV and Gucci have taken a rather radical expansion strategy Gongchenglvede, but now they have been kissed the bitter fruit of their own brew: the popular trend of rampant expansion, resulting in the loss of high-end customers.

Adjusting the strategy seems to be the only way out.

2012 LV revenue of about 7.4 billion euros

Bernard Arnualt, a beats in the capital markets, is adept at creating a mystical atmosphere as the founder of LVMH, the largest luxury group in France.

It is interesting to note that the sales figures for LVMH are rarely mentioned in the company's earnings report, which is classified by 5 business units and not specifically about the brand. Perhaps because LVMH, with more than 50 brands, is too big, but for the group's mainstay LV, the earnings are "double-digit growth".

LVMH's full-year sales rose 19% to 28.1 billion euros from the previous 23.7 billion euros, according to a previous 2012-year LVMH earnings show, with a net profit of 3.42 billion euros, less than the average estimate of analysts in the 3.58 billion euro. Sales growth slowed, especially in Asia, where demand for nearly 30% per cent of the group's income slowed.

In 2012, LVMH's fashion and leather business total revenue of 9.926 billion euros, accounting for the entire group's revenue of 35%, a 14% increase from last year. The recurrent operating profit was € 3.264 billion, up 6.15% from last year's 3.075 billion euros. LV contributed about three-fourths of the earnings, with a revenue of about 7.4 billion euros. Other brands of the business include Fendi, Celine, Marc Jacobs, Donna Karan, Loewe, Givenchy, Thomas Pink, Pucci, Berluti, etc.

From the Sales area, Asia (except Japan) is its largest market with sales of 3.077 billion euros, accounting for 31% of total sales, although the ratio fell by 1% per cent over last year, but revenues increased by 289 million euros. The second is the United States, accounting for 20%, Europe (excluding the French region) accounted for 19%, Japan accounted for 14%, France and other regions are 8%. The number of global stores reached 1280.

Gucci revenue is only half of LV, with Asian market share nearly 50%

Compared with the complex LVMH group, PPR Group is relatively simple, only the luxury sector and sports and leisure departments, the volume is small. 2012 total revenue of 9.736 billion euros, only one-third of the LVMH group. But the luxury sector's total revenue is 6.212 billion euros, accounting for more than 60%, up 15.1% per cent year-on-year.

As the head of the luxury sector, Gucci's total revenue for 2012 was 3.639 billion euros, only half the LV. It was € 3.143 billion in 2011, 15.78% in 2012 and recurrent operating income of € 1.126 billion. Global Direct store up to 429.

From the product classification, leather products accounted for 59% of the total revenue, in the LV product structure, leather products is also the main source of revenue. In terms of geographical distribution, Japan is 11%, Asia-Pacific (except Japan) is 37%, and other countries account for 6%. This shows that LV and Gucci have a high reliance on Asian markets, close to 50%.

Gucci's performance fell in the three quarter of 2012 years ago, although the 2012-year Gucci sales were warmer than in the previous quarter, but the Chinese Lunar New Year's February began to fall again.

Gucci Group parent company PPR President Francois-henri Pinault said Gucci group in the fourth quarter of 2012 sales rose sharply, but is not sure whether the 2013 development prospects are optimistic.

LV focused high-end products Gucci Power supplier channel

It is not hard to see from the earnings data that LV and Gucci rely heavily on the Chinese-dominated Asian market. In order to reverse the growth of fatigue performance, two have adjusted the strategy, but the focus is different: LV focused high-end products, Gucci power electronics.

In January 2013, LVMH chairman Bernard Arnualt said it would curb expansion, focus on high-end products and maintain a high-end image. It also said it would not continue to open stores in China's two or three-line cities to avoid being too commonplace. Analysts say this was due to the fact that Louis Vuitton's sales decline in successive quarters forced extreme adoption of such a strategy.