‘Gucci’s 25% sales collapse should shock no one’

During a recent Luxury Strategy MBA class at Pepperdine’s Malibu campus, I gave my students — affluent Gen Zers and loyal luxury clients — a challenge: analyze Gucci’s brand story and its evolution. What I expected to be a spirited debate quickly turned into a unanimous critique: “Gucci is so boring now.” “They’ve lost all their confidence.” “It feels desperate — just influencers and celebrities.” Comparing Gucci’s bold, visionary eras under Tom Ford and Alessandro Michele and today’s safe, uninspired iteration reveals a stark contrast. That classroom moment reflected a broader truth: Gucci’s Q1 2025 is not a temporary dip. It’s the result of a deeper structural identity crisis — arguably one of the worst brand resets in recent luxury history. The devastating numbers behind Gucci’s collapse Looking at the financial reality, the numbers are brutal. Kering, Gucci’s parent company, reported a 14% drop in group revenue, with Gucci’s sales plummeting by 25%. This performance is far worse than expected — especially given already weak comparables in Q1 2024 and 2023. Billions in revenue have vanished, profits eroded, brand equity diminished, and the stock has tanked. Kering blames declining store traffic and weak wholesale results, especially in Asia (down 25%), Western Europe, and North America (both down 13%). The company also cites broader macroeconomic headwinds, including softening luxury demand in China and the U.S., and new U.S. tariffs. But blaming external factors misses the point. For nearly three years, Kering has promised a brand turnaround that never materialized. From cultural force to forgettable: The three-year slide Gucci’s decline stems from abandoning the storytelling that once made it iconic. Under Ford and Michele, the brand championed bold self-expression, inclusivity, and creative audacity. Gucci wasn’t just a label — it was a cultural force. But as it shifted toward safer, product-centric strategies, it lost the emotional magnetism that made it unforgettable. Confidence gave way to conformity. Inspiration faded into indistinction. Gucci became just another brand — interchangeable and, worst of all, forgettable. Analysts agree: Gucci’s move from a traditional luxury model to trend-driven volume growth fueled short-term gains but eroded long-term brand equity. Unlike Louis Vuitton, Dior, or Hermès, Gucci didn’t evolve — it unraveled. When it pivoted away from what made it great, it had nothing solid to fall back on. Can a designer fix a strategic problem? The appointment of Demna as creative director has failed to spark optimism. No matter how talented, a designer can’t fix a brand without a clear strategic foundation. Demna’s controversial run at Balenciaga, still reeling from scandal and backlash, does little to inspire confidence. Creativity without clarity risks making more noise — not meaning. The core issue? Kering still underestimates the scale of the crisis. For years, leadership clung to cosmetic fixes: design tweaks, product launches, and leadership swaps. But the problem isn’t cosmetic — it’s existential. How much longer can they wait before enacting real change? The luxury world’s cautionary tale In luxury, clarity of brand story isn’t optional — it’s essential. Consumers, especially in uncertain times, seek meaning, identity, and emotional resonance. Once that bond breaks, regaining trust is nearly impossible. And Gucci has broken that bond. This critique comes from love for the brand. As I stated back in February: “I write this with the hope of falling in love with Gucci again… With a clear identity and bold creativity, Gucci can reclaim its place as a brand that shapes culture, not follows it.” But several months on, nothing has changed. Short-term gains, long-term pain This isn’t just Gucci’s problem — it’s a warning to all luxury brands. Chasing trends, diluting your message, or abandoning core values for short-term gains will cost you. Luxury is not about pleasing everyone — it’s about meaning something unforgettable to someone. Gucci’s path forward isn’t about finding a creative savior. It’s about the hard, focused work of rediscovering its identity and expressing it with conviction. Only then can creativity serve a purpose, not just aesthetics. Kering’s catastrophic Q1 should surprise no one. It’s the inevitable result of storytelling neglect and strategic drift. The lesson for the luxury world is clear: in this business, identity is everything. Lose it, and you lose the future. This is an opinion piece by Daniel Langer, CEO of Équité, recognized as one of the “Global Top Five Luxury Key Opinion Leaders,” and advisor to some of the most iconic luxury brands in the world. He serves as an executive professor of luxury strategy and pricing at Pepperdine University in Malibu and as a professor of luxury at NYU, New York. Daniel has authored best-selling books on luxury management in English and Chinese, and is a respected global keynote speaker. Daniel conducts in-person masterclasses on various luxury topics across the world. As a luxury expert featured on Bloomberg TV, Forbes, The Economist, and others; Daniel holds an MBA and a Ph.D. in luxury management, and has received education from Harvard Business School. Sign up for his online luxury masterclasses at the Jing Academy.

‘Gucci’s 25% sales collapse should shock no one’

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Published April 24, 2025

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‘Gucci’s 25% sales collapse should shock no one’