Gucci's overpopulous performance falls

Gucci, the luxury brand of Karing's classic, has recently suffered the worst performance in four years because of the reduction of consumer demand in Asia and the reorientation of high-end products.

Kaiyun’s latest results show that in the third quarter ended September 30, 2013, the group’s revenue fell by 1.5% to EUR 2,523 million. Among them, the luxury goods sector only increased by 1.5% to 1.617 billion euros, while Gucci’s sales fell by 5.4%, which is its worst performance since the financial crisis.

After Kaiyun Group achieved remarkable achievements in China in the past few years, its 2012 performance has shown signs of decline. In the first half of this year, the group claimed that it would stop Gucci’s store expansion in China. According to foreign media reports, Jean-Marc Duplaix, the chief financial officer of the Kaiyun Group, recently admitted that Gucci’s sales in China have fallen.

The financial report shows that in the Asia-Pacific market except Japan, Gucci’s overall sales fell 2%, and the region’s revenue accounted for 36% of Gucci’s global revenue.

Coincidentally, another veteran Louis Vuitton's performance is not satisfactory. According to the latest financial report published by the HYMH Group, excluding the effect of exchange rate changes, the natural growth rate in the third quarter continued to slow, only 2%, lower than the 7% in the second quarter. In the first quarter, 3%, and the most core fashion leather goods, including Louis Vuitton and other luxury brands suffered a 3.8% decline in sales. According to the estimates of foreign analysts, Louis Vuitton achieved only a 1% to 2% performance increase.

In comparison, the two luxury brands achieved sales growth of more than 10% from 2010 to early 2012.

“Gucci’s performance is attributed to the negative performance of the Chinese consumer environment, while the brand is also repositioning to a higher-end market, which has led to a reduction in the sales of low-priced, entry-level leather products.” Duplaix in a conference call That said so.

HBS luxury analyst Antonie believes that their weak performance can not be attributed to the entire industry, and their downward trend in sales reflects more consumer preferences for these luxury brands weakened.

Conscious of the negative impact of over-popularity, Gucci and Louis Vuitton are now trying to reorient focus on high-end products, and more production of LOGO is not obvious and more expensive leather products.

“There is still some progress on the repositioning of the brand, and the change has not yet been completed.” Duplaix told analysts on a conference call. At the same time, he pointed out that unbranded leather bags now account for 55% of the brand's sales of leather goods, compared with 35% in the same period last year, and the price of these products is also about 10% higher.