LVMH And Kering Comprehensive Strength PK Who Is The Winner?

The LVMH group was founded by Bernard Arnault in 1987, combining the world famous leather company Louis Vuitton and the liquor family MOET & CHANDON Hennessy Mo t Hennessy, with more than 50 brands.

The group's main business includes five areas: wine and spirits, fashion and leather products, perfume and cosmetics, watches and clocks, jewelry, and boutique retail.

The group has two irrelevant categories - leather goods, wine and spirits. These two categories can help to eliminate their volatile and fluctuant operating profits.

In addition, the group has established a leading position in the beauty retailing industry, mainly through Sephora and DFS, a retailer dedicated to serving tourists, using its rich synergies of perfume and cosmetics business to steadily increase asset returns.

By contrast, the Kering group's move towards lifestyle brand does not generate effective value for shareholders, and the synergy effect of luxury goods is not as expected.

Since its acquisition of Puma in 2007, the return on investment capital and profit and earnings of its brand have gone in the wrong direction.

In addition, the company gradually withdrew from the general retail industry and shifted its attention to the luxury market. Kering's move to life style made its potential valuation rise ineffective.

Ten years ago, the Kering group's clear goal of "creating value through focusing on luxury" is still the right thing to do now.

In this regard, the LVMH group has an obvious advantage.

In recent years, luxury brands have been hit hard, and all brands such as Coach and Burberry have been damaged.

LVMH and Kering group's largest brands, Louis Vuitton and Gucci, are working hard to protect their long-term attractiveness, increase entry level product prices, inject more novelty into their products, tighten their distribution control and curb shop expansion.

Gucci seems to have been improving the price points of its entry-level products and making its communication and social networking more "advanced", so as to get rid of the luxury aura that consumers are abandoning.

But by contrast, Louis Vuitton has always been more luxurious and expensive, and earlier acknowledged that it needed to suspend the new growth space and maintained strict control over distribution only through its only retail method.

In addition, in the past few years, Louis Vuitton seems to have made efforts to make its style new and focus on making its products, and also joined the new designer, Nicolas Ghesqui re.

In the next few years, this will probably become the top priority of Alessandro Michele, the new creative director of Gucci.

The big brands of the two big groups have already lost their former star aura, no longer the group's rocking Qian Shu, so they need to accelerate their growth of small brands.

Kering group has achieved remarkable results in this respect. Bottega Veneta and Saint Laurent are examples of great significance. Saint Laurent has long been the fastest growing brand in Kering, and more from its small brands including Alexander McQueen and Stella Stella.

LVMH group also seems to realize that it can not rely solely on the performance of the exclusive brand, only recently has the need to adjust the brand business process, through the management of different brands of different prices, styles and consumer groups, but the group's small brands have not yet made significant progress.

This shows that this is the advantage of Kering group.

On the other hand, the watch and jewellery Department of LVMH group seems to provide more room for improvement in the short term, especially in the scope of new products and the emergence of resizing stores, which will promote the productivity and performance of Bulgari sales.

More importantly, the group's wine and liquor sector is the time to repay the annual investment: the profits of champagne are back to the vitality before the crisis, and Cognac is a normal feedback.

This is also the most important area for the group to achieve profit and return.

LVMH group's Sephora and DFS are all positive contributors, both on the whole and in productivity.

The growth of fashion and leather products sector will not increase overnight, but Fendi, Marc Jacobs and

They are promising candidates.

The group has higher structural attractiveness and higher stock market multiplier. However, Kering group is one of the most convincing low valuation in the industry.

The Kering group's efforts are mainly focused on the Gucci brand, although the new creative director Alessandro Michele's latest men's and women's clothing series has won the lead, and he has quickly assumed the responsibility of the Fashion Week fashion show and is immersed in the spring and summer show in September.

In the series, Gucci also needs time to get out of difficulties.

In addition, the cooperation strength of Michele and Marco Bizzarri, the chief executive officer of Kering group's fashion and leather products department and Gucci's new CEO and CEO, will keep the brand running smoothly and prevent the outflow of unfavorable news in the next 12 months.

All in all, these indicate that Kering group is more advantageous in the short term development, while LVMH group gets a higher score in terms of long-term structural attractiveness.