Kering aims to double revenue at Saint Laurent
Saint Laurent is luxury powerhouse Kering’s second biggest brand, exceeded only by Gucci. And the company is hoping to double revenue at the fashion house, and hit $2.2 billion in sales, by 2021. Key to Kering’s plans are Millennial women, who are already Saint Laurent’s largest customer demographic: women between 18 and 34 years old account for 65% of sales, and if you narrow that down to between 25 and 34, it becomes 52%. Kering now wants to increase its relationship with demographic even further, continuing its adjustment to better reflect how these new consumers behave.
Kering’s share price is up by 44% already in 2017
SOURCE: Yahoo Finance
Kering’s CEO, Francois-Henri Pinault, describes this shift:
“Customers’ consumption patterns are changing completely. They have a wealth of information, and they can prepare before they come into shops. A third of customers will visit us online or on social before they go into a boutique. Millennials represent half of sales for Gucci and Saint Laurent, and they are looking for meaning. In this environment, established brands benefit from the support of a big group, given the obvious competitive edge.”
Kering has adopted a powerful digital strategy over the last few years to achieve its penetration into the Millennial market. It has increased the functionality and sharpened up the design on its individual brands website, and become an Ecommerce champion – although the company still refuses to disclose the amount of digital sales it makes.
So it is perhaps not surprising that a big part of Kering’s plan to double Saint Laurent’s revenue is through a doubling of its digital marketing spend. At the moment, only 22% of the brand’s marketing budget makes it to social media, but that will change. Since taking the helm as Saint Laurent’s creative director last year, Anthony Vaccarello has effectively “re-started” the company’s rarely used Instagram account, deleting all its old content. Now, Saint Laurent has 2.2 million followers on the platform. Can it court similar success in regards to its financials?
Dominion holds Kering in its Global Trends Luxury Fund.
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