Gucci introduces 'Made in China' sneakers, breaking Italian tradition
by@Reuters
Summary
Gucci has recently introduced new luxury sneakers labeled "Made in China," departing from its traditional Italian manufacturing. This strategic shift aims to accommodate specific technical needs in production while attempting to attract more price-sensitive consumers amid a challenging luxury market, where parent company Kering has seen share prices falter. While Gucci maintains that Italian craftsmanship remains central to its identity, analysts express concern that this move could undermine the brand's high-end image, especially as it seeks to regain market share through selective price cuts and innovative designs by its new designer, Demna.
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$KER$GUCI
Analysis
Demna: Demna is the creative director at Gucci, having previously held the same role at Balenciaga where he gained prominence for streetwear-influenced designs. He created the Drip sneaker, described as his first for Gucci, as part of the Primavera collection and is preparing a new runway show in Milan. His innovations are viewed as central to Gucci's product strategy and efforts to reconnect with middle-class consumers. Gucci: Gucci is a flagship luxury fashion brand under Kering, renowned for its Italian heritage and high-end apparel and accessories. In this development, it has launched new sneaker models including the Drip, produced in China to meet specific technical performance needs, while affirming Italy remains central to its manufacturing. The initiative forms part of broader efforts under designer Demna to refresh the lineup and appeal to aspirational buyers. Kering: Kering is a global luxury conglomerate whose primary brand is Gucci. It is navigating a turnaround under CEO Luca de Meo, who assumed the role last year, with Gucci's manufacturing shift reflecting strategic responses to sales pressures and the need for cost-effective innovation. The parent company has emphasized that the China production is limited to particular technical requirements rather than a broader relocation of output. Luca de Meo: Luca de Meo serves as CEO of Kering, having taken the position last year to steer a recovery for the group and its Gucci brand. He is overseeing initiatives including new product development and market repositioning amid ongoing challenges in the luxury sector. His early tenure has involved addressing sales declines and investor expectations around brand image. Brand Positioning: Industry observers highlight a potential tension between traditional Italian provenance and luxury brands' attempts to balance innovation, costs, and appeal to price-sensitive aspirational shoppers. Sector Environment: Kering and other luxury groups face a wider industry slowdown, prompting measures such as selective price adjustments to regain market share. Manufacturing Strategy: Gucci has worked with suppliers in Switzerland and Japan for specialized items like watches and eyewear in the past, applying similar criteria for technical capabilities in selecting the Chinese partner for the new sneakers.
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macro