The Brand Doctor … Luxury brand Gucci has dramatically declined in recent years, over-marketed and less exclusive, a confusing avalanche of products and collabs … How to reinvent the iconic brand?

September 1, 2025

Each month The Brand Doctor, business expert Peter Fisk, takes a global brand that has lost its way, and considers how it could reinvent itself. If it’s your brand, do you have the courage to change? If not, what would you do, and how could you apply these ideas for reinvention to your own business?

Gucci at the Crossroads

There is a peculiar cruelty in fashion’s calendar: brands that once seemed able to do no wrong are judged, in a heartbeat, as having done far too much. For Gucci — a house that, in living memory, turned stodgy heritage into unignorable cool and then multiplied that cool across demographics and continents — the turning point has been painfully public.

Once the engine of Kering’s fortunes, Gucci has seen precipitous declines in sales and relevance; commentators point to over-marketing, the erosion of exclusivity, an avalanche of products and collaborations that confused rather than clarified, and a failure to read the new rules of luxury consumption fast enough. The result has been a collapse in demand that ricochets through revenues, margins and market value.

At the same time, another luxury behemoth — Hermès — appears to have mastered the opposite lesson. By refusing to chase every trend, keeping its designs remarkably consistent and protecting scarcity, Hermès has accumulated a valuation that, for a period, eclipsed even that of LVMH. It is not merely a question of taste; it is a story about how brands generate durable value. Hermès’s patient stewardship of craft, queueing systems and carefully managed distribution has turned artistic conservatism into a financial superpower.

So: what went wrong at Gucci? How have markets shifted — notably across Asia and among Gen Z — and what can Gucci learn from the likes of Hermès and other resilient players? Most urgently: what must Gucci do now to arrest the decline and deliver fresh revenue, restore margins and rebuild long-term value? Below is a frank, magazine-style diagnosis, followed by bold prescriptions for reinvention — modest in some parts, radical in others — and a recommended path designed to rescue both brand and balance sheet.

The rise, the reinvention and the overstretch

Gucci’s story is a study in repeated reinvention. In the 1990s Tom Ford rebooted the label with a seductive, hyper-glamourous vision; Gucci became provocative and desirable in one deft pivot. Later, Alessandro Michele — a designer with a taste for maximalism and eclectic nostalgia — turned Gucci into a cultural phenomenon again, producing collections that read as both costume and status symbol. Those changes were not cosmetic; they re-wired demand and repositioned Gucci at the intersection of runway, music and internet culture. For a time, the house was unstoppable.

That success begets imitation, of course, and at scale it begets repetition. The strategy that made Gucci omnipresent — collaborations, limited drops, social-first marketing, rapid rollouts of logo-heavy categories — became the very engine of its over-exposure. By the early 2020s, the brand was ubiquitous: in high fashion, on the high street through knockoffs, in secondary markets, and in product lines that ranged from shoes and handbags to candles and dog-collars. In such ubiquity the brand’s aura faded. Exclusivity is a social signal; when the signal becomes noise, the value of the message drops.

The symptom was easy to measure. Sales fell sharply; Kering, heavily dependent on Gucci for revenue and much of its operating profit, struggled to regain momentum. The backlash was not merely commercial — critics accused Gucci of chasing short-term buzz over a coherent long-term identity. As experiments multiplied — more variants, more capsule collections, more licensed products — the wardrobe of the brand became crowded and its story diluted. The paradox was stark: in seeking to be everywhere, Gucci had gradually become nowhere in particular.

Not all luxury is equal: Hermès and the economics of scarcity

Hermès’s counterexample matters because it shows a very different way to create shareholder value. Hermès has leaned into craft, rarity and patience. It does not chase seasonal hype; it polishes and protects. Hermès limits supply, maintains long waiting lists for iconic items, and keeps a highly vertical supply chain that preserves quality and product mystique. Financially, the payoff is immense: scarcity begets price resilience, margins stay fat, and the brand’s valuation climbs as investors prize predictability and margin sustainability.

This is not simply conservatism as vanity. Hermès’s approach is a business model that optimises for durable pricing power and repeat purchasing among a wealthy client base that prizes provenance over novelty. Its valuation, in turn, reflects the market’s willingness to pay a premium for brands that can convert desirability into predictable profits. That is a lesson Gucci’s current owners must treat as more than an aesthetic observation: it is a stark commercial contrast.

The market has changed: Asia, Gen Z, resale and authenticity

Luxury’s growth engine in the 21st century was Asia. China’s booming demand rewrote the geography of luxury; during the 2010s one could almost predict growth by simply looking at luxury tourism flows and Chinese domestic consumption. But the early 2020s brought disruptions: economic slowdowns, shifting political sentiments and a new generation of consumers — Gen Z — whose attitudes to conspicuous consumption diverge from their elders’. For many young buyers the appeal of a brand is not merely its logo but its social meaning: sustainability, uniqueness, provenance, community and authenticity rate highly. They prize brands that tell a layered story and resist obvious flaunting.

Another seismic change has been the growth of the pre-owned market. Gen Z embraces resale not only for price but because second-hand goods are a route to individuality: a vintage Gucci jacket is different in a way that a brand-new logo print is not. The proliferation of resale platforms and a cultural shift towards circular fashion have undermined the old model where more product simply meant more control. A glut of new product fuels a robust secondary market — and that market, while not inherently negative, indicates a mismatch between supply and the deep, branded desire that powers true luxury pricing.

Asia itself is more nuanced now. Young consumers in tier-one cities are sophisticated and fickle; they are global in outlook and local in sentiment. They want luxury, but redefined: the “look at me” flash of the noughties has been replaced in many cohorts by a quieter wealth — ‘slow luxury’ — where craftsmanship and understatement, or culturally resonant collaborations, matter. Brands that read that shift and adapt their product cadence will find footholds; those that do not risk being judged as yesterday’s flex.

How Gucci compares to its peers

Gucci’s difficulties cannot be solely blamed on managerial missteps. The category has changed. Yet while many houses muddle through, a few have demonstrated the right kind of discipline.

• Hermès has insisted on scarcity, vertical integration and product stability. Its strategy turns product restraint into a pricing lever.

• Chanel similarly controls distribution tightly and resists discounting. It keeps its classic codes intact, and while it does innovate, the changes are incremental and usually feel like cultural continuations rather than riffs.

• Louis Vuitton has blended heritage with forward creative appointments, but it too understands the need to keep many of its most powerful symbols rare and elevated.

• Newer players — from streetwear collaborators to “neo-luxury” digital natives — have done well by carefully mediating how and when they appear. Too many drops, too many lines and too much exposure can be a brand’s undoing.

Compared with these peers, Gucci’s error has been a tempo problem as much as a design problem. It moved from high-frequency experimentation (which had short-term commercial upsides) to a cadence that undermined long-term desirability. The lesson is not that Gucci must freeze in amber, but that control and curation — not ubiquity — produce the sweet spot where both consumers and investors align.

Reinventing Gucci: strategy for brand and balance sheet

Rebuilding Gucci requires a dual mandate: win back cultural credibility with consumers, and repair the business model to restore revenues, protect margins and re-create shareholder value. The temptation is to tinker; the wiser move is to re-set guardrails. Below I set out a strategic plan that is bold yet financially focused.

1. Re-establish scarcity and slow the cadence.
Gucci must reduce the number of launches and limit the volumes of certain symbolic categories. Practically: cap seasonal capsule releases, control wholesale allocations, and create deliberate scarcity for headline SKUs (handbags, belts). Scarcity is not a marketing slogan; it is a pricing mechanism. Over time, fewer but more intentional drops will rebuild waiting lists and improve margin per item. Financially, this reduces discounting risk and improves gross margin.

2. Simplify the offer: focus on fewer product pillars.
Museums and markets show us that clarity creates value. Gucci should identify two or three definitive product pillars (say: handbags/leather goods, footwear, and tailoring/ready-to-wear) and commit to excellence in those areas. Peripheral categories (kitchenware, mass-market fragrances beyond strategic olfactory lines) should be ruthlessly audited. By concentrating investment in the highest margin, highest-status pillars, Gucci will enhance profitability and restore signal clarity to consumers.

3. Rebalance distribution: fewer concessions, more control.
Exclusivity is also about place. Gucci must tighten control over where its most coveted pieces appear, limit promotional partnerships and renegotiate wholesale terms. The company should prioritise direct retail (owned stores and e-commerce) where possible because these channels signal premium and deliver better margins. Financially, shifting mix towards DTC can lift gross margin and give closer customer data.

4. Rebuild desirability through craft and storytelling.
Hermès’s advantage is craft; Gucci’s advantage is cultural energy. Fuse the two. Invest in artisanal lines that foreground Italian craft, create limited craft series that are numbered and certified, and tell the human stories behind them. Consumers will pay a premium for provenance; the margin upside is direct.

5. Lean into circular and experiential commerce.
Rather than pretend resale is a threat to be denied, Gucci should partner with leading resale platforms for authenticated vintage Gucci—curated by the house. This keeps control over the second-hand narrative and captures transaction fees and customer data. Additionally, invest in flagship experiences — ateliers, bespoke workshops, immersive stores — to create reasons for high-value customers to engage physically. These initiatives drive revenue (through services and higher-ticket items) and signal stewardship rather than saturation.

6. Refine collaborations to be strategic, not shameless.
Collaborations should be numbered, purposeful and confined to a long-term cultural project. A handful of culturally compatible partners a year — ideally ones that reinforce craftsmanship or heritage — will keep Gucci culturally relevant without turning it into a playground of endless co-brands.

7. Recalibrate pricing architecture and margin protection.
Gucci must avoid the erosion that comes from frequent discounts. Establish clear tiering — classic, seasonal, and limited-edition — with explicit pricing strategy for each. Protect gross margin by ensuring limited editions and craft pieces command significant premium. Over time, as scarcity re-emerges, the house will be able to lift ASPs (average selling prices) without sacrificing volume in the higher tiers.

8. Reconnect with emerging luxury tastes: Gen Z and Asia.
Winning Gen Z requires authenticity and community. Gucci should invest in local cultural partnerships that are not merely promotional but co-creative: music, art, regional designers and story-led capsule projects that respect local aesthetics. In Asia, embrace local narratives: collaborate with regional artisans, host cultural dialogues in stores and create products that carry local meaning without diluting global codes.

A bolder idea: Gucci as a house of heirlooms

If the above are sensible reforms, here is a more stretching proposition: reposition Gucci as a “house of heirlooms.” This is not mere marketing spin; it is a structural shift in how product is conceived, manufactured and priced.

Under this plan Gucci would:

• Create a certified “Heirloom” line, physically distinct and limited in production, with serial numbers, artisan documentation and repair guarantees.

• Offer lifetime restoration services and an authenticated resale channel run by Gucci itself (a vertically integrated pre-owned business). Gucci would buy back, certify, and resell vintage items — capturing margin on both sale and resale, and tightening the product lifecycle.

• Introduce an archival bespoke service where clients can commission one-off pieces based on historical Gucci motifs, at prices that better reflect the true cost of couture.

• Use this architecture to justify fewer mass launches: mass market desirables could remain, but the brand’s centre of gravity would be a premium, durable, high-margin craft tier.

Financially, this model creates several benefits: higher ASPs for the Heirloom tier; new revenue streams from services and authenticated resale fees; improved gross margins due to premium pricing; and, crucially, higher brand equity that supports long-term valuation. The downside is that implementation requires investment in workshops, artisan hiring and resale infrastructure — but those are investment items with multiyear payback and positive operating leverage if executed properly.

Rebuilding the brand

Whatever path Gucci chooses, execution must be surgical. Recommended immediate actions:

• 90-day sprint: prune lower-margin product lines, halt permissive wholesale deals, and announce a “refinement” strategy to signal seriousness to consumers and investors.

• 12-month plan: roll out the Heirloom pilot, renegotiate key distribution contracts, and launch the authenticated resale partnership.

• 24-month horizon: scale artisan workshops, open experiential flagships, and reveal a curated calendar of collaborations for the next three years.

KPIs to measure progress are straightforward: ASP movement, gross margin by product tier, proportion of revenue from DTC, resale channel take rate, inventory days, and brand desirability metrics (waiting lists, secondary market prices, social sentiment). Restoring profitability is not just about cutting costs; it is about re-creating willingness to pay.

The risks of the plan are real. Scarcity can appear contrived if not supported by product quality. Vertical resale requires competencies Gucci may lack. Slowing product cadence could suppress short-term revenue. But the cost of inaction is greater: continued erosion of brand equity leads to diminished pricing power, frozen margins and a vicious cycle of discounting that delivers immediate sales but destroys long-term value. The market has demonstrated, repeatedly, that investors prize predictability and sustainable margins. Hermès’s premium valuation is the market’s reward for patience; Gucci must aim to reclaim some of that discipline.

The luxury of restraint

Gucci’s predicament is a lesson about the economics of desirability. Ubiquity makes a brand visible; scarcity makes it valuable. In turbulent markets — as Asia’s tastes evolve and Gen Z reshapes the rules — the houses that will win are those that understand not only how to be loved today, but how to remain coveted tomorrow.

The path forward for Gucci is less about radical stylistic reinvention and more about strategic self-discipline. Reduce noise. Invest in craft. Curate scarcity. Privatise resale. Make fewer, more meaningful things, and charge appropriately for them. Rewire distribution so that the most prized items are truly rare. In so doing Gucci will rebuild both its cultural cachet and its financial muscle: higher ASPs, improved margins, more reliable cashflows and — in time — restored market value.

That is the paradoxical freedom of luxury: by choosing to do less, Gucci can again become the house that commands the world’s attention.

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