Gucci Hurting from the ‘Mega-Brand’ Perception

on February 21 2014 | in Fashion | by | with No Comments

gucci, luxury consumers, mega-brand, demand in China

Sales growth at Italian luxury brand Gucci was the weakest in four years, hurt by softening demand in Europe and China.

Gucci’s sales grew by 0.2 percent in the fourth quarter, the lowest since the third quarter of 2009 when sales dropped by 7 percent. The company attributed weak sales to “slackening tourist flows in Europe”; while China is still down, it improved slightly from the previous quarter.

As luxury consumers increasingly favor newer, niche labels, mega-brands such as Gucci and Louis Vuitton are scrambling to fine-tune their strategy and boost their “exclusivity”.

Exacerbating the problem for mega-brands is the current trend in China towards niche and emerging brands. Luxury fashion insiders know that established brands are losing their connection with the next wave of Chinese consumers who are looking for more exclusivity.

Gucci’s sales growth has been under pressure for about a year and the company is adopting a more exclusive strategy in China, which includes raising prices, opening fewer stores, and tightening distribution in an effort to elevate its brand image.

 


photo credit: gucci

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