Could Gucci become bigger than Louis Vuitton?

Does Gucci have the potential to become bigger than Louis Vuitton? Judging
by its latest sales figures, which surpassed the six billion mark, LVMH may
not hold the crown for long.

No wonder François-Henri Pinault of Gucci parent company Kering told the
Financial Times: “We are only at the beginning”. Due to the spectacular
growth Gucci achieved in 2017, led by chief operator Marco Bizzarri and
designer Alessandro Michele, the company has already exceeded the turnover
of Hermès, a brand regarded the as the pinnacle of success of all luxury
companies. In the world of super brand rankings, Gucci remains only behind
the monogram that is Louis Vuitton.

In the past twelve months, the Florentine fashion house “performed better
than the market”, rose from 4.3 billion in 2016 to 6.21 billion this year,
up by 44.6 percent with operating profits of 2.12 billion.

Gucci’s operating profits have doubled

Gucci’s operating profits have quadrupled in the last 18 months, while
revenues have more than tripled. This has led analysts and investors to
wonder how long the brand can sustain these levels of growth, writes the
Financial Times. According to Pinault, over time Gucci could surpass the
sales of Vuitton.

The biggest “Gucci on record” (the Italian press has often compared its
growth to that of Apple in the era Steve Jobs) has meanwhile overtook
another leading name of luxury, the French Hermès, which ended 2017 with
sales growing 7 percent 5.45 bn euros. The brand has seen its grown
‘limited’ to a single digit increase unlike its double digit growth in
2016.

One reason Gucci has seen its sales surge is due to its growing online
presence. Gucci saw its web traffic increase from 1.8M site visits in
January ‘17 to 4.2M visits in December ‘17 – a 130 percent increase in web
traffic, notes Forbes.

Gucci has already surpassed Louis Vuitton in online traffic, even if site
visits do not necessarily mean conversions. According to Forbes, in
December 2017 SimilarWeb tracked 4.2 million US visitors to Gucci.com, as
compared with 2.9 million for LouisVuitton.com.

Interestingly, Gucci was named one of the three 2017 Momentum Award
winners by SimilarWeb in the retail category, the only luxury brand to be
so recognized. Gucci joins Uniqlo.com and Stitchfix.com as leaders in the
online world of retail, based on the company’s algorithm measuring online
traffic and engagement metrics.

Photo credit: Gucci, source: Gucci website; article sources; Forbes,
SimilarWeb

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