In February 2025, it was reported that Gucci had closed two of its locations in China, both in Shanghai. One was at the Réel Department Store and the other at the Shanghai New World Daimaru Department Store on the same day. Gucci only has 7 branches in Shanghai after the closures. With the two latest closures, it has been observed that Gucci has now shuttered 6 of its stores since last year.
Also in February, Gucci’s parent group, Kering, announced the departure of Gucci’s creative director, Sabato De Sarno, before releasing its financial report for Q4 and the full year 2024. Gucci, as one of Kering’s core brands, experienced a 23% drop in revenue to 7.7 billion EUR (8.11 billion USD).
Despite the closures, it is worth noting that Gucci still has 67 boutiques in 34 cities in China, the most of the top luxury brands, compared to Hermès, Dior and Prada’s 30 to 40 stores. Some pundits believe that having too many stores is one of Gucci’s problems, as the stores not only mean cost but also oversaturation and dilution of brand equity, especially the outlet locations. This is why the new strategy was to close some stores for balance.
Of course, Gucci also faces other problems, including a less than clear brand image after Alessandro Michele’s maximalism and the current retro look doesn’t resonate with Gen Z consumers. But with the change in personnel and store closures, it is clear that Kering is working to turn things around. We’ll need to keep an eye out for the Italian luxury brand’s next step.
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