Kering Bets on Younger Buyers as Gucci Sales Slide Deepens

Gucci’s Stumble Forces Kering’s Hand

Kering’s flagship brand is in a prolonged slump, and the French luxury group is running out of patience waiting for it to self-correct. Gucci, which accounts for roughly half of Kering’s total revenue, posted another sharp decline in comparable sales during its most recent reporting period, continuing a slide that has now stretched across multiple quarters. The losses are not marginal – they are structural, pointing to a brand that misjudged its audience at a moment when the luxury market itself was already cooling.

The group’s response is increasingly focused on one direction: younger consumers. Kering’s leadership has signaled that repositioning Gucci toward a millennial and Gen Z buyer profile is not merely a marketing adjustment but a core business priority. Whether that pivot can move fast enough to stop the bleeding is the central question hanging over the company’s near-term outlook.

What the Numbers Actually Say

Gucci’s comparable sales dropped by double digits in recent quarters, a decline that stands in uncomfortable contrast to the relative stability at rival houses like Hermes and Chanel. The gap suggests the problem is not just a soft luxury market – it is something specific to Gucci’s positioning. The brand had spent years chasing an eclectic, maximalist aesthetic under former creative director Alessandro Michele that resonated loudly in the late 2010s and then, almost abruptly, stopped resonating at all. The pivot to Sabato De Sarno’s quieter, more minimal direction has not yet produced a commercial rebound, even as the critical reception has been broadly positive.

Kering’s overall revenue has followed Gucci downward. The parent group reported revenue declines that tracked closely with Gucci’s underperformance, since no other brand in the portfolio – not Bottega Veneta, not Saint Laurent, not Balenciaga – carries enough weight to compensate when Gucci struggles. That dependency is itself a risk the group has acknowledged but not yet resolved.

Retail sell-through rates, particularly in the Asia-Pacific region where luxury demand has softened considerably among aspirational buyers, have been a consistent pressure point. Chinese consumer confidence, which powered much of the global luxury boom through the early 2020s, has not recovered at the pace the industry anticipated. Gucci, which had cultivated deep penetration in that market, is feeling the withdrawal more acutely than brands with a broader geographic spread.

The Youth Strategy, Explained

Kering’s bet on younger buyers is grounded in straightforward demographic logic. Gen Z is entering peak earning years on an extended timeline compared to previous generations, but they are already forming brand loyalties – and luxury houses that fail to appear in their cultural field of vision now risk being invisible to them as spenders later. The window to become relevant to a 24-year-old is not the same as the window to sell to them, but the two are connected.

The challenge is that younger luxury consumers behave differently from the clientele who built Gucci’s revenue base. They are more likely to buy one statement piece than to build a wardrobe across a brand. They respond to cultural credibility – music, art, sport, digital presence – over heritage storytelling. And they are acutely sensitive to perceived inauthenticity, which makes heavy-handed youth marketing campaigns a genuine reputational risk rather than just a creative misstep.

Can De Sarno Deliver What the Market Wants

Sabato De Sarno’s vision for Gucci is cleaner and more restrained than his predecessor’s, drawing on a quieter Italian elegance that plays well with a certain fashion-literate audience. The problem is that “fashion-literate” is not the same as “commercially broad.” A brand recovering from a revenue slide needs volume, and volume in luxury requires accessible entry points – small leather goods, footwear, fragrance – that feel connected to a coherent brand world. Whether De Sarno’s aesthetic translates effectively to those categories is still being tested.

Kering has also been investing in Gucci’s retail experience and digital infrastructure, areas where the brand had fallen behind more agile competitors. The theory is that younger buyers who discover the brand through a well-executed online presence or a reimagined in-store environment will convert at higher rates than those reached through traditional advertising. The theory is reasonable. The execution timeline is the variable.

There is also the question of price architecture. Gucci has pushed average selling prices upward in recent years, following the industry-wide trend toward “price-elevation” strategies that compress the aspirational tier of the market. That move worked well when consumer confidence was high. Now it may be excluding exactly the younger, more price-sensitive buyer the brand is trying to attract. Kering would need to thread a very narrow needle – maintaining the pricing integrity that protects brand equity while creating genuine entry points that don’t feel like afterthoughts.

The deeper tension inside Kering’s strategy is one that every luxury conglomerate is grappling with right now: how do you court a generation that is philosophically skeptical of conspicuous consumption while selling products whose entire value proposition is exclusivity and visible status? Gucci, more than most houses, built its recent cultural moment on exactly that tension – the brand was simultaneously ironic and sincere, accessible and aspirational. That balance was fragile, and it broke. Rebuilding it for a new decade, with a new creative director, inside a company that is watching its share price and its cash flows simultaneously, is a task with no guaranteed outcome. The next two quarterly reports will be the first real measure of whether the pivot is landing or whether Kering needs to consider more drastic structural moves.