Gucci’s China sales have started to rebound, but the French luxury giant Kering, which owns Gucci, indicated that the improvement is gradual and sales trends remain negative.
Kering Finance Director Jean-Marc Duplaix estimated that Chinese shoppers at home and abroad accounted for about a third of Gucci buyers.
Gucci’s weak sales continue to be a drag for Kering despite moves to reposition Gucci to attract a more exclusive clientele. Gucci’s China business was hurt by rapid expansion —”a move that made luxury commonplace and dimmed the luster of a host of European brands.”
“It became a victim of being a popular and recognizable brand,” said James Button, a senior manager at Shanghai-based consultancy SmithStreet.
After some consolidation, Gucci currently has 61 stores in China.
In another move to jumpstart China, Gucci named its Taiwan chief, Merinda Yeung, to run its China business, reports The Wall Street Journal. The former head of Gucci’s China business, Carol Shen, left in January.
Ms. Yeung, a relative newcomer to Gucci who joined the company in February, is tasked with restoring growth in China’s ultra-competitive luxury market.
In general, luxury brands are trying to find their footing in China. The sector remains challenging – luxury sales in China are projected to fall by 2 percent this year, the first time in over a decade.
image credit: flickr/bart