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LV And GUCCI Slowdown In Sales Growth, Adjust Brand Strategy

2013/3/27 13:19:00 12

LV and < a href= "//www.sjfzxm.com/news/index_h.asp" > GUCCI < /a > are particularly important for China's huge market. In order to reverse the growth fatigue performance, the two have adjusted their strategies one after another, but the key points are different: LV focuses on high-end products, and GUCCI makes the electricity supplier. 
 LVMH chairman Bernard Arnualt said it will completely inhibit expansion, focus on high-end products and maintain a high-end image. At the same time, it also said that it would not continue to open stores in the two or three tier cities of China, and avoid being too common. GUCCI is more focused on the management of channels, especially the electricity supplier channels, and LV has not yet opened channels for e-commerce. 
 according to the 2012 quarterly report released before: Gucci sales in the one or two and three quarter of 2012 increased by 12%, 10% and 7% respectively, while the sales volume of LVMH fashion and leather goods department (about 75% contributed by Louis Vuitton) increased by 12%, 8% and 5% respectively, showing a gradual downward trend. Despite a slight increase in the fourth quarter, the whole year's performance is unsatisfactory. 
 LV revenue is about 7 billion 400 million euro 
 in the capital market, Bernard Arnualt is smart and outstanding. As the founder of LVMH, the largest luxury group in France, he is very good at creating a mysterious atmosphere. 
 interestingly, in the earnings report published by LVMH, there is little mention of LV's specific revenue data, which is classified by 5 major business sectors, not specifically related to brands. Maybe because the LVMH with more than 50 brands is too large, but for the LV of the group's mainstay, the earnings report is "two digit growth". 
 according to the LVMH group earnings report released in 2012, LVMH's annual sales rose by 19% to 28 billion 100 million euros from the previous 23 billion 700 million euros, with net profit of 3 billion 420 million euros and less than 3 billion 580 million euros. Sales growth of all brands has slowed down, especially sales growth in Asia, which accounts for nearly 30% of the group's revenue. 
 2012, the total revenue of LVMH group's fashion and leather business was 9 billion 926 million euros, accounting for 35% of the group's revenue, up 14% from last year. Regular operating profit was 3 billion 264 million euros, an increase of 6.15% over last year's 3 billion 75 million euros. LV contributed about 3/4 of its revenue, which was about 7 billion 400 million euros. Other brands of the business department include Fendi, Celine, Marc Jacobs, Donna Karan, Loewe, Givenchy, Thomas Pink, Pucci, and so on. 
 from the sales area, Asia (except Japan) is its largest market, with sales of 3 billion 77 million euros, accounting for 31% of total sales, although the proportion is 1% lower than last year, but its revenue increased by 289 million euros. Followed by the United States, accounting for 20%, Europe (excluding France) accounted for 19%, Japan accounted for 14%, France and other regions were 8%. There are 1280 stores worldwide. 
 GUCCI revenue is only half of LV, and Asian market share is nearly 50% "/p".
 compared with the complex LVMH group, PPR group is relatively simple, only luxury department and sports leisure department, with a smaller body size. The total revenue in 2012 was 9 billion 736 million euros, which was only 1/3 of LVMH group. But the total revenue of the luxury sector is 6 billion 212 million euros, accounting for more than 60%, up 15.1% from the same period last year. 
 as the leader of the luxury sector, the total GUCCI revenue in 2012 was 3 billion 639 million euros, only half of LV. In 2011, it was 3 billion 143 million euros, an increase of 15.78% in 2012 and a recurrent operating income of 1 billion 126 million euros. There are 429 stores in the world. 
 from the classification of products, < a target= "_blank" href= "//www.sjfzxm.com/" > leather < /a > products account for 59% of total revenue, and leather products are also the main source of revenue in LV's product structure. From the geographical distribution, Japan is 11%, the Asia Pacific region (except Japan) is 37%, and other countries account for 6%. This shows that LV and GUCCI rely heavily on the Asian market, close to 50%. 
In the first three quarters of 2012, GUCCI performance declined steadily. Although the Gucci sales in the fourth quarter of 2012 were warmer than those in the previous quarters, the Chinese New Year's February began to decline again in the first quarter of 2012. 
Francois-Henri Pinault, President of PPR group, parent company of P Gucci group, said that the sales of Gucci group in the fourth quarter of 2012 had risen sharply, but it is not clear whether the development prospect of 2013 is optimistic. 
 LV focus on high-end products GUCCI power business channel 
 January 2013, LVMH chairman Bernard Arnualt said it would completely inhibit expansion, focus on high-end products and maintain a high-end image. At the same time, it also said that it would not continue to open stores in the two or three tier cities of China, and avoid being too common. Analysts believe this is due to the Louis Vuitton declining for several consecutive quarters, forcing the extreme adoption of such a strategy. The rapid expansion has led LV to become a "street bag" in China. Its brand image has declined sharply, and the product has become an entry-level "mass luxury". This forced LV to come up with the real high-end killer La Haute Maroquinerie, which is a valuable handbag customized service for VIP, belonging to salon level customization. "Rarity" is the label of luxury goods. LV's La Haute Maroquinerie really achieves "rarity". It is understood that at present, the world only opened a few flagship stores in Paris, Milan, Sydney and Taipei, which can provide services for VIP customers. The 101 Taipei store opened in July 30, 2012 has become Asia's only LV flagship store with La Haute Maroquinerie service, which shows that LV attaches great importance to the Chinese market. 
 and LV are different in product line adjustment. GUCCI focuses more on channel management, especially the channel of e-commerce, and LV has not yet opened channels for e-commerce. 
 at present, GUCCI75%'s revenue comes from direct stores, and its sales channels include e-commerce websites and a limited number of franchise stores. PPR chairman and chief executive Henri Pinault said in a press conference after the 2012 earnings release of the group that the expansion of Gucci brand stores in China in 2013 will be replaced by the renovation and expansion of existing Chinese stores. Although the expansion of offline stores is stopped, GUCCI's investment in online e-commerce will not stop. In 2002, GUCCI began to invest in the electricity supplier. As a supplementary channel, it is also the first luxury brand to invest in the website. 
Besides P, GUCCI also attached great importance to the construction of social networking platform. As of December 2012, the fans of GUCCI on Facebook were as high as 10 million. The latest report of Italy Association of luxury goods shows that: last year, global luxury goods sales accounted for about 2.6% of the total industry, and the annual growth rate will be 20% annually. Social media generates up to 150 thousand information related to luxury brands every day. The highest frequency is referred to the < a target= "_blank" href= "//www.sjfzxm.com/ > > clothing /a > and accessories brands are Burberry and Gucci respectively.