2022 has almost completed one-sixth, recently many fashion brands announced 2021 results, Gucci turned a loss into a profit, the performance of a sharp increase of 30%, so that Kering Group sales exceeded expectations; on the other hand, Hermès 2021 revenue approached 9 billion euros, but the fourth quarter leather goods division sales unexpectedly fell by 5.4%. What is the reason for this round of rise and fall? What is behind the fashion consumption and luxury industries in the "coexistence with the virus"? Let's take a look.
Gucci's performance rose 30%, 3 strategies worked?
After the 2020 pandemic, Gucci's full-year performance fell sharply by 22% to 7.4 billion euros. But in the latest 2021 report card, Gucci turned a loss into a profit and surpassed the 2019 level again, up 18%, up 30% from 2020, and reached 9.73 billion euros in revenue. What did Gucci do right?
In 2020, peers attributed the decline in Gucci's business due to the lack of changes in designer Alessandro Michele's fashion aesthetics and the lack of "classic value-preserving" handbags. It is clear that brand leaders have seen these problems and have made improvements in several areas, resulting in a strong increase in performance.
Reason 1: Gucci Aria series is popular, Balenciaga's most successful "hack" First of all, it is the brand's 100th anniversary Aria series. Alessandro Michele launched Gucci x Balenciaga's crossover with a thousand pounds of effort, which is not only full of topics (Gucci's number of fans on social media platforms such as Facebook, Instagram, Weibo, WeChat and Douyin has grown to nearly 90 million), but also has opened up a new look in fashion aesthetics, and pushed the classic styles of tom Ford's era, which corresponds to the current trend. It's only natural to sell a full house from Season 4 onwards.
Reason 2: The Beloved series establishes 4 classics Followed by the post-epidemic era, consumer mentality has changed, not not to spend, but to be more cautious. What kind of choice does the consumption represent? From the performance, it can be seen that the answer is a more "value-preserving" style. The conditions of "value preservation" are inseparable from the establishment of "classic", "attractive", "de-trending" - classic handbags. In 2020, the brand launched The Beloved series, establishing 4 major handbag styles as the signature works of Heng Yongheng: GG Marmont, Horsebit 1955, Jackie 1961, Dionysus.
The imaginative Alessandro also invited Chinese stars Awkwafina, stars Dakota Johnson, Diane Keaton, models Sienna Miller, male goddess Harry Styles and tennis actress Serena Williams to play American talk show ads, which became a good story.
Reason #3: House of Gucci Became Best "Commercial" Finally, there's the somewhat "House of Gucci" movie. This biographical film directed by Lenny Scott is about the 2nd and 3rd generations of the brand, following the acquisition era of the PPR Group. Although Gucci did not have contact with it, in addition to providing Lady Gaga with some remade retro style costumes, it was only the red carpet clothes of the stars who sponsored the premiere. However, because the film is widely disseminated (whether it is good or not), it has a great publicity effect – especially the heroine's hand, which is also Jackie 1961 – is there a better advertising film than this? However, in the face of LVMH's strongly growing fashion and leather divisions, especially LV and Dior, which grew 51% in the fourth quarter compared to 2019, Gucci is still far behind. And watch a new round of the war unfold in the coming months.
Hermès revenue is approaching 9 billion euros, but the concern is...
On the other hand, Hermès also announced its 2021 results table, with full-year revenue soaring 42% to €8,982 million, operating profit soaring 78% to €3.53 billion, and net profit also recording a strong 77% increase to €2,445 million. But growth slowed in the fourth quarter, with sales falling 5.4% during that period – why did it fall when it was crowded every day outside the store? During the Christmas holidays at the end of the year, Hermès' revenue growth slowed, in contrast to the accelerated growth of other luxury groups. The main reason for the original is not the lack of demand, but the production volume does not meet the supply. "It takes 15 hours to make a Hermès handbag. Even if there is a lot of demand, I don't finish these products in 13 hours to increase production," notes Axel Dumas, the sixth-generation head of Hermès: "Contrary to what people think, we are always very upset when we have to say 'no' to our customers because we don't have that thing." ”
In order to increase production, Hermès recruits about 400 craftsmen a year, but can only set the upper limit of the increase in the number of its leather goods production at 6% to 7% per year. Brands would rather have people waiting for their products for a long time than speed up production. That's why Hermès is at the highest level of luxury. With the exception of France, Hermès' revenues in all regions exceeded pre-pandemic levels, while business in France was affected by a lack of tourists. Axel Dumas said Hermès raised global prices by an average of 3.5 percent this year, up from the usual 1.5 percent, to reflect rising production costs in Europe. But it's still lower than the more aggressive price increases from competitors. Dumas said hermès would not increase its performance through price increases.
Due to the insistence on slow work and fine handicraft production, resulting in hidden performance worries, it is possible to be equalized by opponents, which is indeed a problem worthy of our deep consideration. Luxury goods are not worth cherishing and pursuing because of their high price, but become precious because they are rare. Hermès, which adheres to the beautiful values of tradition, is also worthy of everyone's continued support, right?