Marco Bizzarri sees Gucci as a six-billion-euro brand.
The president and chief executive officer of the Italian luxury label made the projection during an investor day in London on Friday, a day after Gucci’s cruise 2017 show at Westminster Abbey, and detailed his plan for growing the brand by more than double the market average in the medium-term.
Gucci last year registered sales of 3.9 billion euros, or $4.3 billion at average exchange rates for the period, up 11.5 percent from the previous year as Kering’s cash-cow brand started to reap the benefits of the turnaround plan initiated by Bizzarri and creative director Alessandro Michele.
The forecast of six billion euros, or $6.7 billion at current exchange, is for the long term — though Bizzarri did not specify exact dates.
Gucci’s new image has proven a hit with Millennials. Sales to clients aged under 34 rose 50 percent for the spring collection versus the same period last year, according to the slideshow of the presentation, which was posted on parent company Kering’s web site.
The brand has also regained former customers, with double-digit growth year-to-date in Western Europe, the Middle East, South Korea and Latin America, and strong momentum in China.
Reporters were not allowed to attend the meeting, which included a speech by Kering chairman and ceo François-Henri Pinault and a conversation with Michele.
Bizzarri sees scope to grow sales density by up to 50 percent in all regions, making it the main driver of future growth. He plans to more than triple e-commerce business; boost the travel retail channel; reduce the weight of outlets and markdowns, and grow all product categories, including those under license.
Meanwhile, Gucci aims to restore its historic profitability levels by continuing to invest in communications and keeping a lid on costs. It sees its recurring operating income margin returning to 30 percent in the medium term from 26.5 percent in 2015.
The margin fell 370 basis points last year, in part due to exceptional costs linked to the marking down of collections designed by Michele’s predecessor Frida Giannini, in addition to expenses linked to restructuring and store closures.
The brand sees limited expansion for its retail network. As reported, 34 stores were converted to Michele’s new concept last year and an additional 50 overhauls are scheduled for 2016, followed by 40 to 50 a year in the following years.
New visual tools will be deployed in stores that are not refurbished to boost marketing efforts. Since March, both refurbished stores and stores with the new visual tools have experienced double-digit growth versus last year.
A redesigned version of Gucci’s web site was launched in the U.S. in October and in the EMEA region and Australia in March.
Michele, who made a splash with his first runway outing in January 2015 by putting male models in pussy-bow blouses, is set to address a more conservative clientele with specific images in the pre-fall advertising campaign featuring formal and tailored looks.
The newly segmented men’s wear offer will also include preppy, street style and fashion forward looks to ensure full coverage of various market needs.