Gucci has started selling new luxury footwear bearing "Made in China" labels, departing from its long-established Italian heritage in a strategy that market observers warn might threaten its prestige reputation as it attempts to re-engage middle-class buyers.
This decision underscores the delicate balancing act for Gucci designer Demna, who is tasked with launching fresh designs while managing costs to appeal to aspirational consumers—the price-conscious segment forming the majority of the luxury market rather than the ultra-wealthy.
Demna is set to unveil his newest range during a runway presentation in Milan on Friday. Achieving commercial traction is vital for parent firm Kering and CEO Luca de Meo, who stepped in last year to orchestrate a recovery, only to watch an initial rally in equity value fizzle out.
As Kering’s primary revenue driver, Gucci has suffered a 50 percent drop in sales over the last three years, compressing profitability and forcing the conglomerate to shut down dozens of retail outlets.
Echoing his previous work at Balenciaga, Demna has designed an avant-garde footwear line named Drip. According to the brand’s online catalogue, the trainer is marked as "Made in China", a label also visible on items displayed inside Gucci's Paris store.
Addressing the change, Gucci stated that Italy would "always be at the heart of Gucci's manufacturing model and identity", explaining that partnering with a supplier in China aligns with its historical reliance on Swiss and Japanese specialists for items such as timepieces and eyewear.
"The partner selected offered the technological know-how and capabilities most appropriate for achieving the performance and quality standards we were seeking," the company added.
A spokesperson for the house confirmed there are no wider intentions to shift overall production away from Italy.
DEMNA'S FIRST SNEAKER FOR GUCCI
Promoted on the company site as "Demna's first sneaker for Gucci", the Drip debuted last month as a feature of his broader Primavera range.
Priced at approximately €800 within Europe and $1,000 in the US, the shoe is positioned below the cost of typical Gucci footwear while remaining resolutely high-end. Constructed without laces, the design utilises nylon, canvas, or suede materials.
The model marks a distinct departure from classic options like the white leather Ace trainer, offering a sock-like silhouette that recalls Demna's bulky Balenciaga creations that captured the streetwear market during the late 2010s.
A separate leather slip-on design from the Primavera range also carries the "Made in China" origin note on the company's platform. A representative stated that this item was similarly manufactured in China due to technical demands tied to its construction.
Every other footwear option listed with an origin tag on the website continues to be crafted in Italy.
While China serves as a dominant global centre for footwear manufacturing with respected expertise among high-street and premium labels alike, industry analysts argue that Gucci risking its "Made in Italy" association could alienate core customers.
"We think this creates a potential tension between provenance and the luxury positioning Gucci is seeking to reclaim," noted analysts from Berenberg in a research briefing.
Simon Whitehouse, an industry consultant located in Milan, offered a sharper assessment: "Made in China is not a good look," he remarked.
Insiders at parent firm Kering indicated that Gucci has additionally initiated price reductions on selected merchandise across key markets including China, aiming to reclaim market share.
Barclays equity analyst Carole Madjo observed that these discounting measures caught financial markets off guard, prompting investors to closely scrutinise actions that might impact consumer perception of the brand.
"Some people are wondering: should we keep buying Gucci if the price is coming down?" she stated. "Having Chinese-made products could fuel the debate around the brand's price value equation."
Source: Independent
--Agencies
