Gucci, once the crown jewel of global fashion—is now showing deep cracks. Kering SA, the Paris-based luxury powerhouse behind Gucci, Yves Saint Laurent, and Balenciaga, just dropped a bombshell: Gucci's Q1 sales fell by 25%, outpacing even the grim forecasts by analysts.
This isn’t just a bad quarter. It’s a loud alarm bell. More than 60% of Kering’s profit comes from Gucci. So, when the Italian fashion giant struggles, the entire French group wobbles. And right now, Kering’s share price is down a staggering 50% in the past year, faring worse than rivals like LVMH and Hermès.
The company’s hope? Demna Gvasalia, the controversial creative mind behind Balenciaga’s explosive rise. Kering announced last month that Demna would take over Gucci’s creative helm. While he brought streetwear glam with chunky sneakers to Balenciaga, Gucci is a different beast—a bigger brand, a longer legacy, and a much tougher turnaround challenge.
CFO Armelle Poulou confirmed Demna is already working with the team but remained tight-lipped about when his debut collection would hit. And that’s crucial, because time is running out.
But this isn’t just about one label or one designer. The global luxury market is losing its shine. Chinese demand—once a goldmine—is slipping. Add to that US tariffs and a growing trade war, and you’ve got a stormy runway ahead for all players in the high-end fashion game.
Even Hermès and LVMH, long considered invincible, are showing signs of strain. Kering, while still analyzing how to navigate tariffs, says it may hike prices in the US to protect margins. But will consumers keep paying premium prices in a cooling luxury climate?
One thing’s clear—Gucci’s golden era is on pause, and all eyes are now on Demna to script the comeback of the decade.
