As we all known, there is a big luxury retail firm called Kering, which was PPR (Pinault-Printemps-Redoute). Kering owns many famous luxury brands, including Gucci, YSL, Bottega Veneta and Balenciaga. To be honestly, I prefer YSL rather than Gucci. The latest earnings announcement showed that the sales of Kering grew to only 5.6%, which was totally under the expected growth, 8%. The most important reason was that the sales of Gucci really made shareholders concerned, because it its sales growth just fell to 0.6% in the third quarter. Compared with sales of LV, the operating profits of Gucci were only half from 2012. Besides, the sales of Saint Laurent and Bottega Veneta was going to increase year by year steadily. It seems that the position which Gucci had in the luxury world is going to change.

From my perspective, the change of this situation is not only because of the decrease of demand for luxury, but also there are to many competitions in luxury market.  Kering also owns Puma and Alexander McQueen, which make me think that there are also many internal competitors in the same retail firm. Citi analysed that the reasons which attributed Gucci’s weaker performance was its own disruption as Gucci attempted to take itself further upmarket. However, I disagree with that at some extent. It was still due to a decline in demand, and also customers’ performances.

Reference: http://www.bbc.co.uk/news/business-24670183