This is why the crisis-management strategy of parent company Kering under the leadership of former Renault top executive Luca de Meo, who took the helm of the holding company last September, came as a real shock to the industry.

Since de Meo's arrival, Kering shares have risen by a fifth, significantly outperforming the market's main barometer, LVMH. Moreover, this success was achieved not through mythical designer inspiration, but thanks to strict operational and financial discipline.

The measures taken by the new management would be more fitting for a large supermarket chain (like Britain’s Tesco) than an elite fashion house:

• Kering sold its cosmetic assets to L’Oréal for 4 billion euros and revised its commitments to buy out the remaining 70% stake in the Valentino brand.

• The company ruthlessly closed underperforming boutiques and optimized overhead costs.

Lowering Prices to Save Sales

The main sensation was that Kering directed the freed-up funds not into marketing, but into... lowering prices on a portion of its products. According to Bernstein analysts, at the beginning of May, the price tag on the popular Mercato Tote Bag was slashed by 20–25% overnight.

For traditional luxury, this is a taboo: purists argue that such a strategy has a short shelf life, since you cannot endlessly cut costs without damaging the brand's reputation. However, the move paid off: the price cuts helped halt the sales slump in a weak market while simultaneously increasing the company's operating margin.

New Audience and the Trend Toward "Accessible Luxury"

Historically, selling fabulously expensive items to the super-rich was a more reliable business model than targeting the middle class. However, in current realities, "accessible luxury" is experiencing a surge, intercepting buyers who have been scared off by the endless price increases in the ultra-premium segment.

Nevertheless, while the market is weathering a storm, Luca de Meo's pragmatic approach looks unexpectedly fresh and even avant-garde for an industry that is used to placing itself above basic economics. By cutting excess costs and attracting new buyers through more democratic pricing, Gucci is successfully expanding its audience where competitors prefer to lose clients.