Fashion brand Gucci has begun selling new models of luxury sneakers bearing the label "Made in China". This marks a departure from the brand’s Italian manufacturing traditions. In the view of some industry experts, the move could harm Gucci’s image as a luxury-goods manufacturer at a time when the company is trying to win back middle-class shoppers, UNN reports, citing Reuters.
The publication notes that the decision highlights the complexity of the task facing Gucci designer Demna: he needs to create innovative products while controlling costs in order to attract so-called "aspirational" shoppers—the core mass of luxury-goods consumers, who are more price-sensitive than ultra-wealthy clients.
On Friday, Demna will present his new collection at a show in Milan. His success is crucial for parent company Kering and its CEO Luca de Meo, who took over the group last year with the aim of turning it around; however, this year, an initial rise in the share price has given way to stagnation.
Sales at Gucci—the flagship brand of the Kering group—have halved over the past three years, resulting in lower margins and forcing the group to close dozens of stores.
In a style reminiscent of his work at Balenciaga, Demna created a futuristic sneaker model called the Drip. According to information on Gucci’s website, the footwear bears the label "Made in China". Reuters also spotted Drip models with the same label at a Gucci store in Paris.
In a statement, Gucci said that Italy "will always remain at the heart of the manufacturing model and the brand’s identity," but the company decided to work with a Chinese manufacturer—just as it had previously worked with Swiss and Japanese suppliers to produce watches and eyewear.
"The chosen partner offered the technological know-how and manufacturing capabilities that best matched the quality and performance standards we sought to achieve," the company added.
A Gucci representative said there were no broader plans to move Gucci’s production outside Italy.
In addition
The Drip model, which Gucci’s website calls "Demna’s first sneakers for Gucci," went on sale last month as part of the designer’s Primavera collection.
These sneakers cost around 800 euros in Europe and $1,000 in the United States; they are cheaper than many other Gucci footwear models, although they remain in the luxury-goods category. The laceless model is made of nylon, sturdy fabric (canvas), or suede. The Drip differs from Gucci’s more traditional lace-up white leather Ace sneakers; its sock-like shape evokes associations with Demna’s chunky sneakers for Balenciaga—a street-fashion hit of the late 2010s.
According to information on Gucci’s website, another laceless sneaker model (slip-on) from the same Primavera collection also bears the label "Made in China". A brand representative said that this model was made in China for similar technical reasons related to the footwear’s design.
All other Gucci footwear for which the website specifies the country of origin is made in Italy.
The media outlet notes that China is the world’s center of sneaker manufacturing, and local manufacturers have earned a good reputation among both mass-market brands and premium-goods producers. However, some analysts point out that in Gucci’s case, abandoning the "Made in Italy" label could provoke a negative reaction.
"In our view, this creates a potential contradiction between the product’s origin and the brand’s positioning in the luxury segment, which Gucci is seeking to restore," says an analytical note from Berenberg.
Simon Whitehouse, a Milan-based consultant in the luxury industry, put it more bluntly: "The ‘Made in China’ label does not look ideal."
Two sources at Kering told Reuters that the brand has also begun lowering prices on certain products (including in China) as part of measures to regain market share.
Barclays analyst Carole Madjo said the price cuts came as a surprise to some investors, who are now closely watching for any further moves that could affect Gucci’s image in the eyes of shoppers.
"Some are asking themselves: should they continue buying Gucci if prices are falling? — she says. — The presence of Chinese-made products could fuel the debate about the relationship between the brand’s price and value."