The luxury market has been on a downward spiral over the last few years, facing one of its worst slumps since the Great Recession.
This slump is partly due to an unpredictable global economy and ever-evolving consumer habits, causing a softening in customer spending. The downturn is especially evident in the Chinese region, which used to be the top luxury consumer.
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According to the latest report by The State of Fashion, the global growth rate of the luxury industry is predicted to be around 1-3% between 2024 and 2027, signaling that a full recovery of the industry won’t be happening until at least two years from now.
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However, luxury companies are doing everything possible to get their businesses back on track. Many are making multiple changes in their executive and creative teams to develop new strategies in hopes of successfully navigating this tumultuous time.
Gucci names a new artistic director to put the brand back on the map
On Mar. 12, The Kering-owned brand Gucci announced the appointment of Demna Gvasalia as the luxury brand’s newest artistic director, effective July 2025.
Demna might be one of the newest additions to the Gucci family, but he is no stranger to the Kering group. He has been the artistic director of the luxury fashion house’s Balenciaga brand since 2015.
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During the ten years that Demna spent at Balenciaga, he is renowned for helping it rise to fame, making it one of the first streetwear brands to reach the luxury market, and turning it into a beloved celebrity brand through partnerships with A-listers such as Kim Kardashian, who is still an ambassador for the brand.
“Demna’s contribution to the industry, to Balenciaga, and to the Group’s success has been tremendous. His creative power is exactly what Gucci needs. As I thank him for everything he has accomplished over the past 10 years, I look forward to seeing him shape Gucci’s new artistic direction,” said Kering CEO François-Henri Pinault.
Kering suffers the repercussions of the luxury slump
Kering (PPRUF) is a French multinational luxury group that owns some of the world’s most renowned fashion brands, including Yves Saint Laurent, Gucci, Balenciaga, Bottega Veneta, and Alexander McQueen. Although the company is one of the leading luxury fashion houses of today’s generation, it is not immune to the luxury slump.
According to Kering’s annual report 2024, revenue declined 12% compared to last year, with Gucci down 23%, making it the least profitable brand in its portfolio.
Hence, Gucci chose Demna as its new artistic director to hopefully put the brand back on the map, just like he did in his previous role.
Although Demna has many years of experience in the luxury fashion world and a modern understanding of today’s fashion culture, which helped Balenciaga become a megabrand, he also has a controversial past that could taint Gucci’s reputation.
Balenciaga’s controversial campaigns led by Demna
In 2022, Balenciaga released two separate ad campaigns that marked the beginning of a major brand cancellation.
The first campaign was the “Gift Shop,” which consisted of portraits of children holding stuffed teddy bear handbags with fishnets, leather harnesses, and bondage paraphernalia.
This was followed by the 2023 Garde-Robe campaign, which featured celebrities Nicole Kidman, Bella Hadid, and Isabelle Huppert in an office with court documents and images referencing violence against children spotted in the background.
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These controversial campaigns sparked allegations that Balenciaga was involved in child exploitation, along with other concerning allegations, which led to a series of boycotts and endless backlash.
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