A luxury retail brand setting up in China? Been there, done that. Expand the network of stores in a bold move to less familiar retail sites? Been there, done that.
Gucci, plotting its China strategy, has significantly strengthened its retail presence there. The number of stores, since its China entry in 1997, has expanded from four to 39 boutiques. Gucci has already met success in setting up shop in second and third-tier cities that some other brands have only begun to ponder. Beyond Beijing and Shanghai, Gucci goods are snapped up in Chengdu, Dalian, Nanjing, Shenyang, Shenzhen and Fuzhou.
But with all the been-there, done-that bragging rights, the real news about Gucci in China is that its story is far from over. Simply put, Gucci is not done with China yet.
There’s a different Gucci behind the scenes, which is engineering its wildly successful China presence and keeping careful watch on what’s next.
That different Gucci is not in the forms of the prestigious “GG” logo that everyone knows but in the form of another three initials, PPR, which is the French—not Italian—powerhouse group of companies that include other globally recognized prestige brands. PPR has a sports and lifestyle division centered on Puma, of which PPR owns 71 percent, and a business centered on the Gucci Group, whose brands besides Gucci include Bottega Veneta and Yves Saint Laurent.
French fashion and retailing magnate François-Henri Pinault who heads PPR recently announced he was going to take personal control of the Gucci Group, running it himself as he reorganized its parent company, PPR, to focus on the most profitable businesses.
What that announcement most likely spells out for China is his careful scrutiny on China’s market growth and market possibilities as China’s wealthy continue to buoy worldwide sales. According to The New York Times, Pinault is tightening his grip on Gucci at a time when Gucci is witnessing a surge in luxury sales, largely thanks to China.
Gucci’s biggest market is the Asia-Pacific region, and Pinault himself has been quoted as saying that China is taking on a greater importance to the group, as 21 percent of Gucci’s 2010 sales were generated in Greater China — 11 percent on the mainland.
Pinault looks at those figures and sees room for expansion. “We are very far from maturity.”