The Italian fashion house is selectively lowering prices and tightening costs under Kering chief Luca de Meo, signalling a broader shift in a luxury industry confronting fatigued consumers, weaker handbag demand and growing resistance to years of aggressive price increases.
For much of the past decade, the luxury industry followed a remarkably consistent formula: make products scarcer, elevate the brand and steadily push prices higher. Gucci is now testing whether the next phase of luxury growth might require something very different.
Under Luca de Meo, who took over as chief executive of Gucci parent Kering in September 2025, the French luxury group has embarked on an unusually aggressive programme of cost discipline, asset restructuring and selective price reductions. The strategy marks a departure from the industry’s traditional emphasis on creative reinvention as the primary solution to declining sales and suggests that commercial pragmatism is becoming increasingly important as luxury houses fight to reconnect with consumers.
Among the most striking moves has been a reduction in the price of some Gucci products. The Financial Times reported on August 10 that the Mercato Tote Bag, for example, has been marked down by roughly 20% to 25% in some markets. Such reductions are rare in an industry where higher prices have long been used to reinforce exclusivity and protect margins.
The change comes at a delicate moment for global luxury. Years of substantial price increases have contributed to a widening gap between major fashion houses and aspirational consumers, particularly younger shoppers who increasingly question whether expensive handbags, footwear and accessories still deliver sufficient value. Bain has previously warned that repeated price increases risk alienating consumers and creating space for brands positioned at more accessible price points.
Gucci’s repositioning is therefore about more than discounts. Kering is attempting to restructure the economics of the business while preserving its status as one of the world’s most recognizable luxury names. Since taking control, de Meo has moved to reduce costs, close underperforming stores and simplify parts of the group’s portfolio. Kering also agreed to sell its beauty business to L’Oréal in a transaction valued at €4 billion and renegotiated aspects of its relationship with Valentino, moves that have helped reassure investors about the group’s financial discipline.
The approach appears to be receiving an early positive response from markets. Kering shares have risen sharply during de Meo’s tenure, outperforming several luxury competitors as investors bet that greater operational efficiency can create room for reinvestment in Gucci without relying exclusively on further price increases.
Creative direction remains critical. Gucci is simultaneously navigating its reinvention under Demna, the former Balenciaga designer whose arrival has given the house another opportunity to sharpen its cultural relevance. The challenge will be to combine his highly recognizable creative language with a commercial structure capable of reaching consumers who may admire major luxury brands but have increasingly resisted their prices.
Gucci’s experiment also reflects a larger transformation underway across the luxury market. Traditional fashion and leather goods are no longer producing uniform growth. Jewellery has emerged as one of the strongest categories, benefiting from perceptions of permanence, craftsmanship and investment value. Richemont, owner of Cartier and Van Cleef & Arpels, recently recorded particularly strong jewellery sales, while LVMH has also seen greater resilience in watches and jewellery than in some fashion categories.
At the same time, some fashion houses are demonstrating that strong creative momentum can still produce substantial growth. Chanel’s comparable revenue reportedly increased about 16% in the first half of 2026, helped by collections from creative director Matthieu Blazy, illustrating how compelling design can still outperform a difficult market.
Ralph Lauren has also emerged as a notable outperformer. Its latest quarterly revenue exceeded expectations as demand strengthened among younger customers in North America and Asia, with sales in Asia rising 24% and China growing by more than 40%. The company has combined higher-end positioning with a broad lifestyle offering, providing another indication that consumers have not abandoned premium fashion but are becoming more selective about where they spend.
That selectivity may become one of the defining trends of the luxury market in 2026. Consumers continue to spend on products they perceive as distinctive, culturally relevant or genuinely enduring, but the assumption that prestige alone can justify repeated price increases is coming under greater pressure.
For Gucci, selectively lowering prices therefore represents a calculated risk. Making certain products more accessible could help rebuild volume and attract younger or aspirational consumers, but luxury brands must also guard against weakening the perception of scarcity and exclusivity on which their pricing power ultimately depends.
The wider industry will be watching closely. If Gucci manages to revive growth while simultaneously improving efficiency and moderating prices, it could challenge one of luxury fashion’s most entrenched beliefs: that becoming more desirable necessarily means becoming more expensive.
In a market increasingly divided between ultra-wealthy clients and consumers who have become sceptical of luxury inflation, Gucci’s experiment may prove to be more than a turnaround strategy. It could signal the beginning of a new luxury cycle — one in which value, creativity and accessibility matter almost as much as exclusivity.
