Could Gucci become bigger than Louis Vuitton?

Does Gucci have the potential to become bigger than Louis Vuitton? Judging by its latest sales figures, which surpassed the six billion mark, LVMH may not hold the crown for long.

No wonder François-Henri Pinault of Gucci parent company Kering told the Financial Times: “We are only at the beginning”. Due to the spectacular growth Gucci achieved in 2017, led by chief operator Marco Bizzarri and designer Alessandro Michele, the company has already exceeded the turnover of Hermès, a brand regarded the as the pinnacle of success of all luxury companies. In the world of super brand rankings, Gucci remains only behind the monogram that is Louis Vuitton.

In the past twelve months, the Florentine fashion house "performed better than the market", rose from 4.3 billion in 2016 to 6.21 billion this year, up by 44.6 percent with operating profits of 2.12 billion.

Gucci's operating profits have doubled

Gucci's operating profits have quadrupled in the last 18 months, while revenues have more than tripled. This has led analysts and investors to wonder how long the brand can sustain these levels of growth, writes the Financial Times. According to Pinault, over time Gucci could surpass the sales of Vuitton.

The biggest "Gucci on record" (the Italian press has often compared its growth to that of Apple in the era Steve Jobs) has meanwhile overtook another leading name of luxury, the French Hermès, which ended 2017 with sales growing 7 percent 5.45 bn euros. The brand has seen its grown 'limited' to a single digit increase unlike its double digit growth in 2016.

One reason Gucci has seen its sales surge is due to its growing online presence. Gucci saw its web traffic increase from 1.8M site visits in January ‘17 to 4.2M visits in December ‘17 – a 130 percent increase in web traffic, notes Forbes.

Gucci has already surpassed Louis Vuitton in online traffic, even if site visits do not necessarily mean conversions. According to Forbes, in December 2017 SimilarWeb tracked 4.2 million US visitors to Gucci.com, as compared with 2.9 million for LouisVuitton.com.

Interestingly, Gucci was named one of the three 2017 Momentum Award winners by SimilarWeb in the retail category, the only luxury brand to be so recognized. Gucci joins Uniqlo.com and Stitchfix.com as leaders in the online world of retail, based on the company’s algorithm measuring online traffic and engagement metrics.

Photo credit: Gucci, source: Gucci website; article sources; Forbes, SimilarWeb