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Gucci Continues to Rake it in Despite Expectations of a Slowdown

Never underestimate the power of Alessandro Michele.
A look from Gucci's Spring 2019 collection. Photo: Dominique Charriau/Getty Images for Gucci

A look from Gucci's Spring 2019 collection. Photo: Dominique Charriau/Getty Images for Gucci

Gucci is challenging the notion that its exponential growth spurt under the unstoppable duo of Creative Director Alessandro Michele and CEO Marco Bizzari can't go on forever. In its last earnings report, which encompassed the first half of the year, parent company Kering announced that despite Gucci's 44-percent sales growth (which helped Kering's profits jump 185 percent!), it expected the Italian house's growth to "normalize" or slow down a bit moving forward.

Analysts expected Gucci's Q3 sales to level out to under 30 percent, but instead sales grew 35.1 percent, marking the brand's seventh consecutive quarter of revenue growth over 35 percent. This quarter's success came from all sales channels and regions: E-commerce was particularly strong with online sales up a whopping 70 percent. Of course, that "normalization" still seems to be taking place, just, perhaps, a bit more slowly that analysts and even Kering anticipated. Never underestimate the power of Alessandro Michele.

One brand whose growth does seem to be leveling out, however, is Saint Laurent. Since former creative lead Hedi Slimane left and ultimately took his commercial magic (and the exact same branding and aesthetic) to Celine, Gucci has clearly replaced Saint Laurent as Kering's rapidly-growing golden child. Anthony Vaccarello's Saint Laurent is still hanging onto double-digit growth — comparable sales in Q3 were up 16.1 percent — but there's an obvious deceleration happening, and what Slimane is doing at Celine right now probably won't help to change that in the coming seasons.

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As for Kering's less buzzy brands, Bottega Veneta continues to struggle with comparable sales down 8.4 percent; new Creative Director Daniel Lee will debut his first collection in February. Kering didn't break out sales numbers for Balenciaga, but said it "delivered another period of particularly noteworthy, well-balanced growth," while Alexander McQueen saw "favorable growth trends."

Overall, Kering doesn't have too much to be upset about: Comparable sales were up 27.5 percent. "Our growth, whose pace is unprecedented in the Luxury sector, is sound, well balanced and sustained across all regions and distribution channels," said CEO François-Henri Pinault in a statement. "The talent of each of our Houses at creating strong emotional ties with its customers, conceiving a bold, generous creative universe, and reinventing its codes, is at the root of Kering's success."

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