Gucci banks on high-end jewellery for further growth
Iconic fashion brand Gucci, the jewel in luxury giant Kering’s crown of brands, has branched out into the world of high-end jewellery. Last Tuesday, the brand made its first foray into this world with a dedicated store in Paris, which it hopes will extend its powerful reach into the wider luxury sector. This is a necessary move for the Italian fashion house: over the past three years it’s beaten almost all of its rivals, but signs that point to slower growth are here. In the first quarter, it expanded by 20% - still an incredible number for a brand of its size, but significantly lower than we’ve previously seen.
Kering’s share price has appreciated by 31% so far this year
Source: Yahoo Finance
Gucci’s goal is clear – to eclipse rival giants Louis Vuitton and Chanel and become the world’s biggest single luxury brand by revenue. To accomplish that goal, Gucci is branching out into other areas, like cosmetics. In regards to its jewellery ambitions, the names to beat include Cartier and van Cleef & Arpels, owned by luxury giant Richemont, and also with dedicated properties in Paris.
Jewellery is a small, but growing, part of the luxury sector. Worth around 18 billion euros (according to consultancy firm Bain), it was one of the fastest growing segments last year (seeing revenues increase by 7%), alongside shoes. Gucci will have its work cut out for it, competing with other, longer-established, names in the sector, but if the brand has proved one thing over the last few years, it’s that it’s more than capable of living up to the hype. And as owner Kering completes its pivot towards the highest of high-end luxury, Gucci’s new product offerings will help it to retain top-spot.
Dominion holds Kering in its Global Trends Luxury Fund.
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