Gucci boss: slower growth is on the way, but we’re still nailing it
If you’re a luxury investor who holds French fashion giant Kering in your portfolio (and if you invest in Dominion’s Luxury Fund, you are), then one of this year’s big stories is probably the outperformance of iconic brand Gucci. Gucci is the jewel in Kering’s crown, and has run roughshod over its competitors over the last 12 months, delivering record revenues. A massive driver of this success is designer Alessandro Michele, who has revolutionised the brand, and kept it out in front of most rivals style-wise since 2016. And the boom has lasted longer than most analysts expected.
Kering’s share price has risen by 17% year to date
SOURCE: Yahoo Finance
This month, the brand’s CEO, Marco Bizzarri, has issued warnings about a period of slower growth. However, his message is quite simple: a minor slowdown is nothing to worry about after rapid expansion, particularly as you start knocking up against record comparables from the previous year.
In a video sent to staff, Mr. Bizzarri said: “I am here today to reassure you in the sense that Gucci is stronger than ever,” and added that Gucci was maintaining its competitive advantage over “any other brand in the arena.” However, he said “we need to recognise the fact that at a certain point we’re going to slow down, we cannot keep on growing 50, 60 % per month, it’s impossible.” Despite the impending slow down, he concluded “I’m happier now than I was two years ago, I’m very confident.”
Dominion holds Kering in its Global Trends Luxury Fund.
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