Luxury group Kering has reported its most profitable year on record after Gucci sales rose 45% in Q4 2017.
According to consultancy Bain & Co, this growth has been led by millennial shoppers, with customers under 35 making up 85% of growth last year.
“The brand has an even greater potential than had been estimated, we need to build it up over time”, said Chief Financial Officer Jean-Marc Duplaix said in a call with reporters.
"We have a new generation of designers who have a more global vision”.
In their official statement, Kering said:
“Kering delivered a phenomenal year in 2017. We created over 3 billion euros in additional revenues in a single year, and generated more than a billion in additional EBIT. Gucci, whose performance was nothing short of spectacular, is amplifying its desirability across all markets. Saint Laurent is on a rapid growth track, while Bottega Veneta pursues its redeployment. Balenciaga is charting an impressive development trajectory, and our other Luxury brands are experiencing positive momentum. All of our Houses enjoy huge growth potential, rooted in their skills at reinventing codes, enhancing desirability through bold creative visions, and thereby creating value. We unequivocally demonstrated the strength of our business model. In a global environment that remains uncertain, we will not relax our vigilance, but we are confident that the complementarity of our Houses, our geographic footprint, the diversity of our customer base and the strengths of an integrated Luxury Group will enable us, this year again, to do much better than our markets.”
Last month Kering sold off 70% of shares in Puma to its own investors and announced the future sale of Volcom in order to focus on its high-end labels – part of its renewed focus on becoming a “pure play” luxury company.
Luxury goods have had a renaissance in recent years thanks to the rise of social media and cash-rich millennials. Gucci’s recent success is due to embracing technology and innovating their eCommerce platform to meet customer’s expectation while maintaining brand standards. Brands need to seek out ways of fully integrating eCommerce into their digital strategy and offer customers more than a social media presence. Customers want to shop now, and brands willing to make that possible and convenient will thrive.