Europe’s luxury retailers may be returning to form
LONDON — On London’s Bond Street, home to some of the most expensive retail space in the world, only one store needs to instigate crowd control, the luxury brand of the moment: the Italian fashion and accessories powerhouse Gucci.
By midmorning on a wet and windy British midsummer day, burly security guards had erected velvet ropes along one side of the store’s gilded floor-to-ceiling windows. Inside, a dozen black- clad assistants raced around on magenta carpets, serving about 20 customers on the ground floor. An orderly line made up mostly of tourists formed outside, many of them looking hungrily through the corner store’s glass panes.
It is this sort of slavish devotion from Gucci’s customer base that resulted in the brand’s reporting a 43.4 percent increase in sales in the first six months of the year. That, combined with a sales increase of 28.5 percent from its sister brand YSL, propelled its parent group, Kering, to record growth in revenue and profits for the period.
The Kering results came 24 hours after LVMH Moet Hennessy Louis Vuitton, the world’s largest luxury group by revenue, said strong growth in Europe and Asia had bolstered sales by 12 percent in its second quarter. Profit for the first half of the year also grew at its fastest rate since 2011.
Another rival, the upmarket Italian outerwear company Moncler, said it expected its business to grow further this year after it posted higher-than-expected growth in revenue for the first half of 2017.
That is part of a trend in the luxury sector. European power players do not just appear to be quietly on the rebound; they are back with an emphatic bang.
The success is evident on Bond Street, where Wendi Liu, a visitor from China, joined the line outside the Gucci store, accompanied by her older sister. Clutching their iPhones, the pair wore oversize Gucci sunglasses and planned