Gucci has released new footwear from its Primavera collection that is manufactured in China rather than Italy. These Demna-designed sneakers represent a significant pivot in the luxury house's production strategy.
The $1,000 Drip sneaker and the pivot to Chinese manufacturing
The new footwear lineup includes the Drip sneaker, a laceless, sock-like design crafted from suede, canvas, or nylon, alongside a slip-on leather model. According to the source, these shoes are priced at approximately 800 euros in Europe and 1,000 dollars in the United States. This pricing strategy aims to attract "aspirational shoppers" who are price-sensitive but still desire the prestige of the Gucci brand.
The design of the Drip sneaker,which is the first sneaker Demna has created for Gucci, reflects the chunky, streetwear-inspired aesthetic he previously championed at Balenciaga. While the brand has traditionally relied on its Italian heritage, the report says that Gucci chose a Chinese partner for these specific models due to the partner's technological expertise and the technical requirements of the designs.
Kering's strategy to reverse three years of sales declines
This shift in manufacturing comes at a precarious time for Gucci. The brand has seen its sales drop sharply over the last three years, a trend that has forced parent company Kering to close sveeral retail locations. Under the leadership of CEO Luca de Meo, Kering has launched various turnaround initiatives to stabilize the luxury house's financial performance.
By moving some production to China, Gucci can lower its overhead costs while maintaining a high retail price point. This move is part of a broader trend where luxury brands attempt to balance the high costs of European craftsmanship with the operational efficiencies of global manufacturing hubs. However, the decision to move production is a stark contrast to the "Made in Italy" ethos that has historically defined the brand's value proposition.
Berenberg and Barclays analysts flag the risk to 'Made in Italy' prestige
Industry observers are skeptical about the long-term impact of this decision. Analysts from Berenberg have warned that the "Made in Italy" label is a cornertone of Gucci's luxury identity, and shifting production to China could create friction with consumers who prioritize authenticity. this sentiment was echoed by Milan-based consultant Simon Whitehouse, who described the Chinese labeling as "not a good look" for a high-fashhion house.
Similarly, Carole Madjo, an analyst at Barclays, expressed surprise regarding the pricing and production changes. As the report says, investors are closely monitoring whether these moves will diminish the perceived value of the Gucci brand in the eyes of ultra-wealthy clients who pay a premium specifically for European provenance.
The Reuters report on price cuts and the future of the Primavera line
Beyond the manufacturing shift,there are questions regarding Gucci's broader pricing strategy. Sources from Kering told Reuters that Gucci has begun implementing select price cuts, particularly within the Chinese market, to regain lost market share.. This suggests a two-pronged approach: reducing prduction costs via Chinese factories while simultaneously lowering prices to stimulate demand.
It remains unclear whether the "Made in China" label will extend beyond the Primavera collection to other product categories. While Gucci maintains that Italy remains central to its manufacturing model,the brand has not specified which other technical requirements might justify further shifts in production. Stakeholders are now looking toward Demna's upcoming Milan runway show to see if this manufacturing pivot is a one-off experiment or a permanent change in direction.
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