PARIS — Having seen its sales jump 42 percent in 2017, Gucci has set its sights on the next revenue milestone: 10 billion euros.
The Italian luxury brand revealed the target, without specifying a timeframe, in a document published on parent company Kering’s web site to coincide with its investor day in Florence on Thursday, dedicated to Gucci and Kering Eyewear.
This would place it in the same league as Louis Vuitton, the world’s biggest luxury brand, owned by rival French conglomerate LVMH Moët Hennessy Louis Vuitton. Though LVMH does not break out sales for individual fashion brands, analysts pegged Vuitton’s revenues upwards of 9 billion euros in 2017.
Gucci maintained its strong momentum under chief executive officer Marco Bizzarri and creative director Alessandro Michele, posting sales of 6.2 billion euros last year, exceeding market expectations.
The maker of Dionysus handbags and $590 logo T-shirts also aims to increase profitability, with a recurring operating margin target of 40 percent, versus the 34.2 percent recorded in 2017.
Despite a strong comparison base, organic sales at Gucci vaulted up 48.7 percent to 1.87 billion euros in the first quarter, representing the fifth consecutive quarter of growth exceeding 35 percent.
The brand will face a tougher comparison base in the second half, though Kering’s chief financial officer Jean-Marc Duplaix said he does not expect Gucci to break its stride.
“We are confident for the remainder of the year. We see also very positive signs when we look at wholesale orders,” he told analysts in April after the group reported first-quarter revenues.
Having exceeded its initial target of doubling sales density to 30,000 euros per square meter, Gucci is now striving for 45,000 euros, the investor day document said. It plans to increase store space by roughly 3 percent per year, mainly thanks to store enlargements and selective buybacks.
Gucci also aims to triple revenues from e-commerce, with the planned rollout of online sales to new markets, and double revenues from licenses, including its fragrances produced by Coty, according to the presentation.