China reacts to Gucci and Versace leadership shake-up

What happened Donatella Versace is stepping down as the creative director of Versace after almost three decades at the helm of the Italian fashion house her late brother Gianni built. Brand owner Capri Holdings announced the decision amid reports that Prada is nearing a $1.6 billion deal to acquire the financially struggling brand. Dario Vitale, Miu Miu’s former design and image director, will take over the reins on April 1, while Donatella will assume a new role as chief brand ambassador. Gucci’s Demna gamble: A smart move? Meanwhile, Kering announced the appointment of Demna, who brought the previously niche Balenciaga into the global limelight, as Gucci’s new artistic director, filling the vacancy a month after Sabato De Sarno’s abrupt departure following a short-lived two-year tenure. The move signals the French luxury conglomerate’s pressing need for the maverick master to inject new life into its underperforming flagship brand. The Jing Take At a time when luxury brands are making extra efforts to navigate declining sales in China’s softening market, an increasing number of fashion maisons have changed design chief to boost flagging performance. Around half of Kering’s brands will have a new designer this year. However, the high-profile changes have stirred a wave of heated discussions on China’s social media. Many Chinese netizens lamented that an era had ended with Versace’s departure. There was widespread praise for one of the most accomplished female designers in modern luxury history. While steering the brand to becoming a household name, she became a cultural icon in her own right, beloved by both big-name celebrities and fashionistas. Her green silk chiffon “jungle dress” worn by Jennifer Lopez at the 2000 Grammys played a role in shaping pop culture in the 2000s. On the runway, the red carpet, and beyond, she created multiple sensations with her bold, brash design. “Will Versace take on a rebellious girl aesthetic?” @MrYuhe commented on Xionghongshu (also known as RedNote). All in all, the two brands, despite their shared embrace of femininity, cater to contrasting tastes: Miu Miu is youthful and playful yet classy, while Versace embodies sensuality through sumptuously maximalist designs. The rapid decline from boom to bust in the luxury segment in the wake of the pandemic has left much of the industry reeling. Changing consumer preferences, shaped by a range of factors including China’s prolonged property crisis, and younger demographic prioritizing well-justified value propositions, are redefining the luxury landscape. In 2024, millennials and Gen Zers, trend-forward yet financially savvy, accounted for around 60% of Chinese luxury consumers. Kering’s revenue slide continued in 2024, when income dropped 12% YoY, weighed down by Gucci’s 23% YoY sales plunge. Kering closed two Gucci stores in Shanghai last month amid a whirlwind of luxury exits from the once lucrative market. Reactions to Gucci’s decision are more mixed. @Matoko Lee, a fashion writer, shared his thoughts on Demna’s appointment: “It’s a risky move. From Vetements to Balenciaga, Demna’s overall approach has remained largely unchanged, which means Gucci may follow a similar path.” Many netizens shared this opinion, voicing concern that Demna’s highly eccentric, experimental style may drag Gucci deeper into the doldrums. But given his stellar success at Balenciaga, from Ikea totes to monster sneakers, he may jumpstart Gucci with his sharp grasp of contemporary cultural trends. Can Demna fix Gucci’s declining sales? De Sarno’s tenure at Gucci may serve as a cautionary tale. In 2023, he was appointed to reset Gucci following Alessandro Michele’s seven-year reign of baroque maximalism, as the Kering leadership thought a more restrained, discreet approach would align with the spirit of the times, though the Michele era had propelled the brand to annual revenues of over $10 billion. That bet, however, proved misguided. De Sarno’s subtle minimalism ended up leaving consumers underwhelmed. Nonetheless, if brands keep changing their creative heads to respond to market conditions, consumer loyalty may shift from brands themselves to the designers. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Donatella’s exit, Gucci’s bet on Demna: China reacts

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Donatella’s exit, Gucci’s bet on Demna: China reacts