- The specialist said Gucci and Louis Vuitton’s growth profiles have reversed post-COVID-19, with customers favouring less fashion-forward products. Gucci could grow by mid-single-digits vs Louis Vuitton’s double-digit growth, we were told.
- We heard that Louis Vuitton has a higher share of carry-over products and that Gucci should seek to improve its share in this area. Gucci’s internal reorganisation could indicate a lack of satisfaction with creative director Michele Alessandro’s approach, according to the specialist.
“I think that in recession, even more than what’s happening during the lockdown, the customer base with a reduced purchase capacity will look for brands that are more reassuring [to] them, so, potentially, LV vis-à-vis Gucci could have a benefit from that.”
- The specialist told us that there is customer “overlapping” across Gucci and Louis Vuitton. However, they said that Gucci is more reliant on Asia-based customers and that Louis Vuitton’s new collaborations are “very relevant for the new generations”.
- We were told that Gucci is heavily reliant on its outlet channel in D2C and might have to keep part of its wholesale business. The specialist predicts Louis Vuitton’s sales density could be 75% better than Gucci’s.
- According to the specialist, Louis Vuitton’s favourable gross margins are a result of its high leather goods share, limited discounting and supply-chain capacity. Gucci’s store count increases its rent-to-sales ratio, the specialist added.
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