Luxury brand Gucci plans to open two to four more stores this year in China, after opening its 28th on Saturday, undeterred by uncertainty in the global economy as China is set to lead future luxury consumption, Gucci CEO Patrizio Di Marco said.
In a few years the luxury brand, owned by French retail and fashion group PPR SA, aims to have 40 stores in China, compared with the 50 it now has in Japan and roughly 70 in Europe, Di Marco added.
''We're not planning to scale back, especially considering the future importance of this market,'' he told Reuters in an interview.
''Look at a country like China. To have 28 stores, or to think of having 40 stores, is not excessive at all.'' He was unwilling to say when the impact of the current global downturn on the luxury sector might ease and gave no time frame for achieving the 40 store target in China, which will depend on overall market conditions as well as development of second- and third-tier cities and real estate opportunities.
''We have to take it as it comes day after day. This is the worst time, not just in this industry, but also in other industries,'' he said. ''But at the end of the day, no one knows how things will be.'' The financial crisis, shrinking investment portfolios and mounting job losses have crimped spending on luxury branded goods.
Richemont, the maker of Cartier watches, warned last month that business conditions would remain challenging through to September, after it reported a 12 percent drop in its operating profit for the latest business year.
Gucci brand leather goods bucked the slump with 8 percent sales growth in the first quarter at constant exchange rates, although Bottega Veneta and Yves Saint Laurent, other luxury brands in the Gucci Group, posted a double-digit drop.
China has become a key area for the group's sales growth.
Sales of Gucci-branded products in China, Hong Kong and Macao jumped 41.5 percent in 2008 and helped to drive 8.1 percent revenue growth for the Gucci Group overall to 3.38 billion euros ($4.72 billion). That amounted to about one-sixth of PPR's total revenue.
''Chinese consumers will probably be the driving force of the luxury industry in the years to come because of the size of the market and because of easier possibilities for consumers to travel,'' Di Marco said.
He expected Chinese travellers to contribute heavily to the tourist shoppers' market, much as Japan's brand-conscious consumers have in the past.
''Very likely, China will assume the role that was Japan's to be the backbone of the luxury industry,'' he said.