Whether the move can truly win back lost consumers will be decided by the market.
At a time when the luxury goods industry widely relies on price hikes to maintain profit margins, GUCCI has taken a completely different path. According to disclosures, the brand has quietly implemented a 20% to 25% retail price reduction on selected handbags, footwear and ready-to-wear products. This adjustment is a permanent price reset, rather than a limited-time online promotion. The brand’s goal is clear: to bring regular luxury consumers back to official stores, instead of letting them turn to outlet malls or discount channels.
This price adjustment covers multiple core categories. In the handbag category, the Mercato large tote bag designed by Demna for the 2026 Spring-Summer collection has seen its price reduced from approximately €1,950 to €1,560 .
Almost all handbags in the Generation Gucci collection are now priced below $2,000, including the Gossip small shoulder bag at €950 and the Lunetta small crossbody bag at €980. For ready-to-wear, polo shirts have been cut from €650 to €455, and T-shirts from €550 to €385. In the footwear category, selected GG Supreme canvas sneakers have been reduced from €800 to a range between €560 and €595.
According to reports from Vogue Business, the team led by Bernstein analyst Luca Solca first noticed unusual price movements on the Mercato tote back in May this year. This adjustment is seen as part of a broader strategy by GUCCI and its parent company Kering to boost sales and win back aspirational consumers.
Kering’s management has publicly acknowledged that previous price hike strategies “went too far” and caused tangible damage to sales. During the second-quarter earnings call held in July 2026, Kering Group CEO Luca de Meo stated that the company had “tested price elasticity” in the past, and the move had a “very significant impact” on sales. Data shows that GUCCI’s second-quarter revenue fell 2% year-on-year to €1.41 billion. While this figure beat market expectations, the brand has seen consecutive annual sales declines since the 2022 fiscal year, with its 2025 fiscal year revenue dropping 22% year-on-year.
This is not a predicament unique to Kering. LVMH’s Fashion and Leather Goods division saw its 2025 fiscal year sales fall by 8%, and most mainstream fashion houses and luxury groups have faced revenue decline pressure over the past few years. According to statistics from HSBC, the average price of personal luxury goods surged by 52% between 2019 and 2024.The price of the Chanel Classic Flap handbag has risen from approximately $1,000 in the 1980s to $5,800 in 2019, and now stands at as high as $11,700. Since its launch in 2007, the price of the Louis Vuitton Neverfull handbag has tripled, climbing from about $645 to over $2,000.
Under the combined pressure of the post-pandemic price hike wave, high inflation, slower macroeconomic growth in China and geopolitical issues in the Middle East, consumer purchasing power has been further weakened. Younger generations of consumers in particular have begun to question the rationality of these steep premiums. A late-last-year survey from Vogue Business shows that 72% of Gen Z luxury consumers would rather choose Walmart’s “Wirkin” handbag than a Hermès Birkin, believing that spending huge sums on luxury goods is “tacky” and that many new products are simply not worth their listed prices.
Achim Berg, former senior partner at McKinsey and founder of corporate think tank Fashion Sights, pointed out: “There is a serious disconnect in the luxury industry, and that is the fundamental issue at the heart of this pricing discussion. Many people simply cannot understand why prices keep rising when product quality does not improve. This is not a niche problem — it is the core challenge facing the luxury industry right now.”
Bernstein analyst Luca Solca spoke positively about GUCCI’s move: “We believe direct price cuts could harm brand equity. But there is no doubt that the product portfolio needs downward price adjustments, so that top-tier brands can re-address affordability and rebuild connections with their core aspirational consumers. The sooner this happens, the better. GUCCI has shown the courage to bear this cost, even with the greater risks it poses to brand equity.”
The Generation Gucci collection has an average price point of around $2,000, 27% lower than the previous average price of GUCCI handbags. Industry consensus holds that cutting prices on newer styles like the Mercato carries far less risk than touching iconic classic pieces like the Chanel Double Flap or Lady Dior — the latter would lead consumers to question the inherent value of the products, a scenario luxury brands are most unwilling to face. As luxury analyst Robert Burke put it: “A price cut would be a very loud statement that the product is not worth its original price. That is far too risky.”
As Eric Fish, head of US Retail and Apparel at HSBC, noted: “The value of luxury goods ultimately comes from the shared perception of inherent value between the brand and its consumers. When a luxury brand cuts prices, it is effectively signaling that this shared consensus has cracked.”
By taking the initiative to adjust prices at this juncture, GUCCI has not only made a commercial strategy correction, but also launched a test of the entire luxury industry’s long-standing pricing logic. Whether this path can truly win back its lost consumers will be the final answer delivered by the market.
FAQ
Q: What is the scope of GUCCI’s latest price adjustment?
A: The permanent 20%-25% price cut covers selected handbags, footwear and ready-to-wear products, with almost all handbags in the Generation Gucci series priced below $2,000.
Q: Why did Kering’s management decide to push forward this price adjustment?
A: Kering publicly admitted that previous aggressive price hike strategies “went too far” and caused tangible damage to sales, with GUCCI recording consecutive annual revenue declines since the 2022 fiscal year.
Source： style
