Gucci, under new designer Demna, is attempting to reverse a significant sales decline, including a 25% revenue drop last quarter, by implementing an unconventional 'see now, buy now' strategy for its latest collection. This immediate availability approach has yielded early positive results, with U.S. store traffic increasing notably, including a 53% rise at its Rodeo Drive location post-launch. While these initial gains suggest renewed consumer interest and a potential broadening of the brand's appeal, particularly through more accessible price points, the strategy's long-term impact on sales conversion and its contribution to Kering's overall performance are still under evaluation.
Asia stocks: Nikkei soars to record high as Takaichi win fuels stimulus bets By Tassilo Hummel and Mimosa Spencer PARIS (Reuters) -Gucci’s "see now, buy now" approach for the first collection from new designer Demna, harnessing a buzz around the brand to draw shoppers back to its stores after years of lackluster sales, is showing some early success, data shows. Demna stole the show at Milan Fashion Week last month, dropping images of his first-ever Gucci collection on social media a day before the official debut in the style of a star-studded film premiere, an unusual move. The day after the celebrity-packed event, Gucci again broke with industry conventions, making the new products from the Milan show immediately available in ten flagship stores until October 12. Big luxury houses usually stick to a rigid calendar of fashion shows months before clothes hit the shops. But Gucci’s fast-track approach is showing some early improvements in store traffic in the United States, foot-traffic data compiled by Placer.ai and provided to Reuters by Colliers, shows. At the Rodeo Drive store in Los Angeles, one of the boutiques stocked with the new products, traffic rose steadily in each of the four days following the Milan show on September 23, with weekly store visits up 53% from the previous week, the data showed. At Gucci’s Wooster Street store in New York weekly traffic was up 19%. Country-wide store visits in the U.S. reached their highest level in three weeks the weekend after the Demna launch, the data showed. Gucci-owner Kering and Gucci declined to comment when asked about shopper appetite for the Demna collection. DEMNA’S NEW DESIGNS KEY TO REVITALISING GUCCI BRAND The success of the new collection from Demna, who only uses one name, would be a major step towards reviving the struggling Gucci brand, which makes up a majority of sales and profit at French conglomerate Kering. Kering CEO Luca de Meo and Gucci’s boss Francesca Bellettini, both recent appointments, are under pressure to reverse Gucci’s two-year sales decline. Gucci’s revenue plummeted 25% year-on-year in the last reported quarter. Store traffic further slowed this year, Bellettini, then Kering’s deputy CEO, said in July. Gucci’s new fashion show-to-store move is unusual in the business and has only been used occasionally, mostly by smaller labels including Jacquemus and Burberry. But Gucci’s instant commercial test makes sense, said Laure Anne Chansel, who teaches fashion marketing at the EIML business school in Paris. "What is the story the brand has told lately? There isn’t much." Gucci needs to bank on the window of newfound attention after a period of flux following the previous designer’s departure in February, Chansel said, referring to Sabato de Sarno. LUXURY LABELS FIGHT TO WOO BACK SHOPPERS On Paris’s Avenue Montaigne, one of three boutiques selling the collection in Europe, sales assistants last week said they had not seen such interest in months. "I ended up being there longer than I thought,” said Gayle Deifel, a tourist from California, adding that she was surprised to discover Demna’s new collection, including fur coats, a gold dress and new editions of Bamboo and Jackie handbags, already in the store. She bought a pair of leather boots. The new collection, which will be rolled out more broadly in January, also hints at the brand’s commercial approach as it seeks to attract younger and less wealthy shoppers who turned away from luxury spending due to economic uncertainty. The luxury industry, which is in a downturn, needs to win back these customers who were put off when companies aggressively raised prices to focus on the super-wealthy. Gucci’s new styles seen so far could widen the label’s appeal, said luxury consultant LinLi Teh, a former buyer for London department store Liberty. “I think he’s hitting the angles of all the Gucci customers over the past decades,” she said, referring to Demna, who comes from Georgia. In the Paris store, the brand displayed a downsized and less expensive version of its classic Jackie bag near the checkout. At just under 2,000 euros ($2,347.00), the price is well below 3,200 euros for other Gucci styles. NEW DESIGNERS SEEK TO GRAB THE SPOTLIGHT Demna has taken the reins at Gucci amid an industry-wide reshuffle, with new designers also at Chanel, Dior and Loewe -- all seeking to make their mark. Gucci’s deep-pocketed rivals are staging elaborate events and campaigns, with LVMH recently creating a Louis Vuitton boutique shaped like an ocean liner in downtown Shanghai. Heavily-indebted Kering, meanwhile, is under pressure to balance marketing investments with a cost-cutting drive. In China, Demna’s Milan fashion week debut was broadcast at a VIP event with local celebrities in Beijing. This spurred a brief spike in online attention that faded within two days, said Alexis Bonhomme, who runs the luxury consulting firm Trinity Asia. "The campaign has increased the talkability, but conversion into sales remains to be demonstrated," he said. ($1 = 0.8522 euros) Is PRTP part of an AI-powered winning strategy? ProPicks AI evaluates PRTP alongside thousands of other companies every month using 100+ financial metrics. Using powerful AI to generate exciting stock ideas, it looks beyond popularity to assess fundamentals, momentum, and valuation. The AI has no bias—it simply identifies which stocks offer the best risk-reward based on current data with notable past winners that include Super Micro Computer (+185%) and AppLovin (+157%). Want to know if PRTP is currently featured in any ProPicks AI strategies, or if there are better opportunities in the same space? Kering's primary brand, Gucci, is attempting a strategic pivot to reverse a significant performance decline, which includes a two-year sales slump and a 25% year-on-year revenue drop in the last reported quarter. The new management is implementing an unconventional 'see now, buy now' model for the debut collection from new designer Demna, a departure from the traditional luxury industry calendar. This initiative has yielded encouraging early indicators, specifically in U.S. store foot traffic, which saw a 53% week-over-week increase at the Rodeo Drive flagship and a 19% rise in the Wooster Street store. This tactical shift is complemented by a product strategy aimed at broadening consumer appeal with more accessible price points, such as a Jackie bag variant priced under €2,000. However, these positive signals are preliminary and based on traffic rather than sales conversion, which Kering has not commented on. Significant uncertainty remains, particularly as initial online attention in the crucial China market reportedly faded quickly, and experts note that conversion into sales is yet to be demonstrated. The negative per-ticker sentiment for Kering (-0.6) reflects that investors are still heavily weighing the confirmed revenue collapse against these tentative green shoots.
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