Kering's Gucci aims for 10 billion euros revenue threshold
FLORENCE, Italy (Reuters) - Italy’s Gucci, the biggest earnings driver at French group Kering (PRTP.PA), said on Thursday it expected sales to grow at twice the pace of the luxury market in the coming years and for revenue to eventually reach 10 billion euros ($11.82 billion).
The fashion company did not outline a timeline for its ambition in a presentation posted on Kering’s website. More details of its strategy update were due to be released later on Thursday.
But it compares to 6.2 billion euros in annual revenue clocked up in 2017, when it came behind LVMH’s (LVMH.PA) Louis Vuitton as the second biggest luxury label in the world.
Gucci has so far defied expectations of a gradual slowdown, after its re-invention with a flamboyant new style under designer Alessandro Michele lifted sales.
The brand added that it aimed to have an operating margin of more than 40 percent, compared to around 34 percent in 2017.
Gucci’s challenges include ensuring its kooky style will keep customers coming back, as it develops a following for high-margin items like leather handbags.
Gucci CEO Marco Bizarri and Michele, who both came on board in 2015, gave the brand a top-to-bottom makeover, with new product ranges.
Stores were redesigned to make them more welcoming, in vivid hues and draped in velvet; resources were ploughed into online sales, including an e-commerce site in China last year which has helped fuel sales growth.
Gucci said on Thursday it would continue to invest in e-commerce, and aimed to further lift sales densities - a measure of how profitable its stores are.
These could eventually reach 45,000 euros by square meter on an annual basis, from just over 30,000 euros in 2017, according to the presentation.
Reporting by Sarah White, Pascale Denis and Sudip Kar-Gupta; Editing by Leigh Thomas and Brian Love
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