Gucci (Kering KER:EN) alternative data indicators

Italian luxury label Gucci, owned by French fashion conglomerate Kering (KER:EN), has been on a winning streak since second half of 2016. An unprecedented growth in revenues and margins is a result of great work both on the creativity side and on the management side as well: firm discipline on distribution channels, geo-pricing alignment and the lowest levels of promotions seen in the market in 2017 (which contributed significantly in keeping sales on their directly operated channels and margins high).

Here a snapshot of what can bee seen from an alternative point of view: Website traffic estimates, web search interest and surge in wholesale availability (SKU) on a dominant web player, normalized for benchmarking. You can benchmark these KPIs with our analysis on Tods Group.

Alternative indicators as search interest and share of shelf correlate with Kering stock price
Alternative indicators as search interest and share of shelf correlate with Kering stock price

Post-Winter hiccups

Looking at alternative signals, we noticed strong upsides since the second half of 2016, which became bitcoin-like growth one year later.

Q1 2018 signals on web search and website traffic estimates suggest the hype might be have paused at a plateau: A hiccup in these indexes is common after winter sales (see the graph with highlighted the changes in these metrics around that time of the year), what was uncommon in Gucci’s case was the absence of this drop in 2017 (when they achieved a +42% in revenue).

But also assuming softer “hype” metrics, Q4 2017 was such a strong starting point that even with smoother acceleration rates, Q1 2018 indicates still significant quarter-over-quarter performance.

Gucci search interest and website traffic
Gucci search interest and website traffic

A fine-tuned distribution

Farfetch is a great observation point (see our analysis): potentially limitless shelves, almost 130 independent boutiques that sell Gucci products, all very diligent in price setting and none willing (or daring) to put anything on promotion.
This reduced wholesale cannibalization in favor of direct retail channels, in one of the best interpretations of the digital marketplace we have seen in 2017.

2018 starts with this machine fully tuned-in: even if there are little levers left to pull, they will benefit for 12 months of highly optimized  distribution.

The fact that SKU count seems to have slowed down, can be easily re conducted to the fact that they are already selling every SKU Gucci has on the catalog.

Gucci products on shelf
Products and shelf