Kering: Gucci’s great, but have you checked out Balenciaga?
It’s official: Balenciaga is growing fast than any other Kering brand. The luxury conglomerate, which has grown massively in recent years to become a company equal in scope to LVMH and Richemont, is often mentioned alongside its “flagship” brand, Gucci. But, while Gucci is seeing incredible growth, and is obviously a giant in its own right, Balenciaga is, in fact, Kering’s fastest-growing brand.
Kering’s share price has increased by 10% over the past 30 days
SOURCE: Yahoo Finance
First things first: lets give credit where it’s due, and appreciate the sheer extent of Gucci’s recent growth. The brand started 2018 in rare fashion, posting an incredible 49% growth in sales, year on year. It was also the top selling and most searched brand of 2017 in the luxury space.
Yet, Balenciaga’s dominance in sales growth was revealed last week, when the brand’s CEO, Cedric Charbit, revealed that it’s outpacing every other label at its parent company. In Charbit’s words, Balenciaga has seen “more than 100% growth” in certain categories, including such staples as handbags, clothing and footwear.
Charbit is pretty clear about what’s driving this growth: millennials. He noted that these consumers now make up more than 60% of the brand’s customer base, and they’re not skimping on their luxury purchases. He also mentioned a growth in male customers, who are increasingly paying attention to their appearance.
Speaking at the Financial Times Luxury Goods conference in Venice in May, Charbit said: "There's not a dinner I go to where a father or someone doesn't say, 'Stop releasing these shoes, it's out of control, we spend too much money at Balenciaga', which I'm very happy with."
Dominion holds Kering in its Global Trends Luxury Fund.
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