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Luxury Sales Slump for Three Straight Years
Luxury Sales Slump for Three Straight Years: Has the Luxury Price‑Hike Myth Faded?
Global luxury fashion is witnessing a landmark shift, as the long‑prevailing price‑hike growth model finally collapses. According to Kerings full‑year financial report for 2025, the French luxury conglomerate recorded a 13% year‑on‑year revenue drop to 14.7 billion, with its flagship brand Gucci suffering a staggering 22% sales decline. This marks Guccisthird consecutive year of negative growth, falling sharply from its 10 billion revenue peak in 2022 and nearly losing 40% of its market value in just three years.
For years, luxury brands including Gucci relied on annual price increases of 10% to 15% to boost profits, achieving steady revenue growth without substantial product upgrades. However, this rigid strategy has backfired completely. Kering CEO Luca de Meo officially admitted that the industrys price‑raising power no longer exists.
Excessively high pricing has broken the balance between product value and consumer perception. Meanwhile, the continuous slump of Guccis classic styles in the second‑hand market has further eroded consumers willingness to buy full‑price products, leading to sustained sales pressure.
Facing the severe performance downturn, Kering has launched comprehensive restructuring strategies. The group plans to shut down 100 net stores worldwide in 2026, 40% of which are located in saturated Asian markets including China, South Korea and Japan, optimizing redundant offline channels to cut operational costs. In terms of product layout, Gucci is turning to entry‑level markets for self‑rescue, launching affordable collections like La Famiglia with prices 30% to 40% lower than traditional mainline products, aiming to recapture price‑sensitive young and middle‑end consumers.
Notably, Kerings internal brand performance shows obvious differentiation. While Gucci remains in a deep downturn, Bottega Veneta achieved steady growth, and Saint Laurent maintained stable profit margins, reflecting stronger market recognition for value‑oriented and low‑key luxury designs. Encouragingly, Guccis Q4 sales decline narrowed to 10%, driving Kerings stock to record its largest single‑day surge since 2020, signaling marginal improvement.
The industry transformation is irreversible. The era of relying solely on price increases to drive growth has ended. In the future, luxury competition will fully return to core product strength, design innovation and brand tonality. Whether Guccis price adjustment and store optimization strategies can reverse its three‑year decline will become a key benchmark for observing the new development logic of the global luxury industry.
Global luxury fashion is witnessing a landmark shift, as the long‑prevailing price‑hike growth model finally collapses. According to Kerings full‑year financial report for 2025, the French luxury conglomerate recorded a 13% year‑on‑year revenue drop to 14.7 billion, with its flagship brand Gucci suffering a staggering 22% sales decline. This marks Guccisthird consecutive year of negative growth, falling sharply from its 10 billion revenue peak in 2022 and nearly losing 40% of its market value in just three years.
For years, luxury brands including Gucci relied on annual price increases of 10% to 15% to boost profits, achieving steady revenue growth without substantial product upgrades. However, this rigid strategy has backfired completely. Kering CEO Luca de Meo officially admitted that the industrys price‑raising power no longer exists.
Excessively high pricing has broken the balance between product value and consumer perception. Meanwhile, the continuous slump of Guccis classic styles in the second‑hand market has further eroded consumers willingness to buy full‑price products, leading to sustained sales pressure.
Facing the severe performance downturn, Kering has launched comprehensive restructuring strategies. The group plans to shut down 100 net stores worldwide in 2026, 40% of which are located in saturated Asian markets including China, South Korea and Japan, optimizing redundant offline channels to cut operational costs. In terms of product layout, Gucci is turning to entry‑level markets for self‑rescue, launching affordable collections like La Famiglia with prices 30% to 40% lower than traditional mainline products, aiming to recapture price‑sensitive young and middle‑end consumers.
Notably, Kerings internal brand performance shows obvious differentiation. While Gucci remains in a deep downturn, Bottega Veneta achieved steady growth, and Saint Laurent maintained stable profit margins, reflecting stronger market recognition for value‑oriented and low‑key luxury designs. Encouragingly, Guccis Q4 sales decline narrowed to 10%, driving Kerings stock to record its largest single‑day surge since 2020, signaling marginal improvement.
The industry transformation is irreversible. The era of relying solely on price increases to drive growth has ended. In the future, luxury competition will fully return to core product strength, design innovation and brand tonality. Whether Guccis price adjustment and store optimization strategies can reverse its three‑year decline will become a key benchmark for observing the new development logic of the global luxury industry.