Gucci thinks Alessandro Michele’s decadent universe of crystal-coated sunglasses and painted handbags can become nearly as profitable as Louis Vuitton’s dipped canvas totes.
After growing 45 per cent last year, Gucci’s annual revenue of 6.2 billion euros ($7.3bn) surpassed that of rival Hermes International. Now the Italian brand, owned by Kering of France, is setting its sights on $12bn, according to an investor presentation Thursday.
While not giving a time frame, Gucci also said it aims to widen its operating margin to at least 40 per cent after reaching 34 per cent last year. The new target would be nipping at the heels of Louis Vuitton, whose margin is estimated at being the highest in luxury.
Gucci’s ambition is to become “a definitive 21st century statement of contemporary coolness,” Michele said in the presentation.
To achieve the new goals, Gucci plans to increase retail space about 3 per cent a year and triple online sales, which reached 270 million euros last year. It’s also concentrating more on its own store network as it aims to reduce its reliance on distributors. Wholesale revenue was 14 per cent of the total in 2017, down from 16 per cent the prior year.