The luxury market has been experiencing a notable downturn over recent years, leading to one of its most significant slumps since the Great Recession. This decline is attributed partially to an unpredictable global economy and shifting consumer habits, resulting in decreased customer spending. The impact is particularly prominent in the Chinese region, which was previously the largest consumer of luxury goods.
According to The State of Fashion report, the global growth rate of the luxury industry is projected to range from 1-3% between 2024 and 2027. This forecast indicates that a full industry recovery is not expected until at least two years from now. In response, luxury companies are implementing various strategies to regain stability. Many are making significant changes to their executive and creative teams to devise new approaches for navigating the challenging market conditions.
Gucci, a brand owned by the Kering group, has announced the appointment of Demna Gvasalia as its new artistic director, effective July 2025. Demna, who has directed Balenciaga—a brand also under Kering—since 2015, brings considerable experience to his new role. His tenure at Balenciaga is notable for elevating it to prominence as a leading luxury streetwear brand, garnering popularity through collaborations with high-profile celebrities such as Kim Kardashian. François-Henri Pinault, CEO of Kering, expressed confidence that Demna’s creative impact would significantly benefit Gucci’s new artistic direction.
Kering, a major French multinational luxury group that owns several prestigious fashion brands, including Yves Saint Laurent, Gucci, and Balenciaga, has not escaped the effects of the luxury market slump. The company’s 2024 annual report reveals a 12% decline in revenue compared to the previous year, with Gucci’s revenue falling by 23%, making it the least profitable brand within Kering’s portfolio. Gucci’s decision to position Demna as its artistic director is intended to revitalize the brand, drawing on his past success at Balenciaga.
While Demna has been instrumental in shaping Balenciaga into a powerhouse in the luxury fashion world, his career has not been without controversy. In 2022, Balenciaga launched the “Gift Shop” campaign, which featured children holding teddy bear handbags associated with themes of bondage. This was followed by the 2023 Garde-Robe campaign, which included images of celebrities in settings that controversially alluded to violence against children. These campaigns resulted in allegations of child exploitation, leading to widespread public backlash and boycotts against the brand.
