From 2015 to 2019, Gucci’s sales rapidly increased from 3.8 billion euros to 9.6 billion euros, with a compound growth rate of up to 36%. But Gucci’s hidden dangers today also lay the groundwork for this style transformation.
Gucci’s retro romance has been loved by young people, which has led to Gucci having more trendy characteristics and deviating from the traditional luxury brand’s route. In fact, in the past few years, the trend of luxury brands becoming more trendy was very obvious, and the most extreme trend may have been towards Balenciaga.
After Gucci’s sales exceeded 10 billion euros for the first time in 2022, it failed to maintain its position as a “billion club” in 2023, with sales of 9.873 billion euros, a year-on-year decrease of 6%.
According to the China Luxury Report, the global luxury goods market grew by 7% year-on-year in 2023, with China recording a growth rate of 9%. Chinese luxury goods consumption accounted for about 38% of global luxury goods consumption. This indicates that Gucci has fallen far behind the market performance.
According to the official statement of Kaiyun Group, the main business issue lies with Gucci. And Gucci has always been the core source of revenue for Kaiyun Group, accounting for about two-thirds of the total revenue, with the Chinese market contributing about one-third of Gucci’s revenue. As for other brands under the umbrella of Saint Laurent, Baodie Jia, and Balenciaga, the overall revenue marketing of Kaiyun Group is not significant.
The brand recognition of Gucci’s red and green contrasting colors has always been high, with a bright red and green leather style that was loved by local bosses in the early days, so Gucci was labeled as a nouveau riche in the early days.
Later, Gucci took the initiative to seek change and, under the leadership of the new CEO and creative director, began to transform into a “retro romantic” style of design. Still contrasting red and green, paired with a retro style, it has become a personality proposition that has been loved by many young people. In addition to the representative God of Wine bag, even Father’s shoes have become Gucci’s bestsellers.
