By Tassilo Hummel FLORENCE, Italy, April 16 (Reuters) - Kering's biggest brand Gucci must rebuild its position in China after years of complacency when it treated the market as a place for easy growth
Gucci to Revamp China Strategy as Kering CEO Calls for Major Overhaul
By Tassilo Hummel
Kering's Strategic Shift in the Chinese Luxury Market
FLORENCE, Italy, April 16 (Reuters) - Kering's biggest brand Gucci must rebuild its position in China after years of complacency when it treated the market as a place for easy growth, with poorly located stores and an outdated retail experience, Kering CEO Luca de Meo said on Thursday.
Gucci's Missed Opportunities and Market Challenges
For over a decade, China was the biggest source of growth for the $400 billion global luxury sector and Gucci was able to capitalise on that more than its peers. But it failed to seize on a brief post-pandemic shopping boom and never recovered when Chinese consumer spending subsequently slowed down.
Retail Experience and Store Locations
Speaking on the sidelines of Kering's first investor day since he took office in September to try to revamp the group, de Meo said Gucci needed to tailor its Chinese stores to discerning clientele and must stop relying on off-price outlets, where goods are sold at discounts.
CEO's Direct Remarks on Gucci's Strategy
"Gucci has to be back," de Meo told reporters. "Gucci in China has been used as a – can I use a very strong expression – a bit of a trash bin, or a place where they were looking for easy growth."
Changing Preferences of Chinese Shoppers
CHINESE SHOPPERS' TASTES HAVE CHANGED
China has evolved into a sophisticated luxury market, de Meo said, contrasting it with earlier years when demand was driven by logo‑centric buying rather than quality, design and experience.
Focus on Quality and Experience
"People are very discerning for what is good, what is bad, the quality, demand...not just having a logo on something and buying," he said, adding that the shift mirrors earlier changes in markets such as Japan, South Korea and Europe.
Revival Strategies and Competitive Landscape
Reviving growth in China meant focusing on coherent messaging and in‑store experience. Kering also announced it would acquire a minority stake in Shanghai-based Icicle Fashion Group.
Learning from Other Industries
In addition, de Meo, who joined Kering after a successful tenure as Renault CEO, cited lessons learned from the car sector. Luxury brands must not underestimate domestic competition and specifically China's skill for innovation, he said.
Comparisons Within Kering's Portfolio
Some labels within Kering's luxury portfolio, including Bottega Veneta and Saint Laurent, had already benefited from a sharper China strategy, de Meo said, but Gucci’s recovery would take longer.
Outlook for Gucci's Recovery
"For Gucci, I would say the jury’s out. It’s not going to happen in weeks. But you can probably measure that in months, a year, something like this."
(Reporting by Tassilo Hummell; editing by Barbara Lewis)
