Gucci Is Growing So Rapidly It Has to Reboot Its Entire Manufacturing Process

Gucci is going full steam ahead with its expansion plans.

Parent company Kering announced at an investor presentation on Thursday that it is targeting annual revenues of 10 billion euros ($12 billion) for the white-hot brand, surging ahead of category leader Louis Vuitton, owned by rival LVMH.

Gucci CEO Marco Bizzarri said that “it’s not a question of if but when” the brand overtakes the top spot, considering Gucci’s surging growth numbers and sustained interest from consumers around the world, particularly in the Chinese market. In the first quarter of 2018, the brand reported 48.7 percent growth year-over-year, leading the “outstanding sales momentum” at Kering overall.

In order to keep up with the feverish demand and keep product offerings as fresh and innovative as possible, the Italian brand is bringing an increasing share of its leather-goods production in-house, Bizzarri said.

So far, according to Reuters, it has bought out 10 local suppliers, and plans to do the same with an additional 10. It is also working on joint ventures and exclusive partnerships with artisans and manufacturing facilities.

Ultimately, it aims to reduce the use of independent suppliers from 75 percent to 40 percent of its manufacturing of leather goods, which will help slash its lead time in half.

On top of speed, he said, “you are able to experiment much more in terms of innovation” if production is brought in-house, giving the brand a leg up on its competition that will no doubt be valuable in sustaining its momentum.

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