The luxury market has experienced a significant decline over the past few years, facing one of its most severe downturns since the Great Recession.
This decline can be attributed to an unpredictable global economy and constantly shifting consumer habits, leading to a reduction in customer spending. The slowdown has been particularly evident in the Chinese region, which was once the leading market for luxury goods.
According to a recent report by The State of Fashion, the global luxury industry’s growth rate is projected to be between 1-3% from 2024 to 2027, indicating that a full recovery is unlikely for at least two more years.
Luxury companies are taking various measures to revitalize their businesses, including restructuring their executive and creative teams to develop new strategies aimed at overcoming these economic challenges.
On March 12, Gucci, a brand owned by Kering, announced the appointment of Demna Gvasalia as its new artistic director, effective July 2025.
While Gvasalia is a new addition to Gucci, he is already familiar with the Kering group, having served as the artistic director of Balenciaga since 2015.
During his decade-long tenure at Balenciaga, Gvasalia played a key role in elevating the brand to prominence, transforming it into one of the first streetwear labels to enter the luxury market and securing its status as a favorite among celebrities. His collaborations with high-profile figures, including Kim Kardashian—who remains an ambassador for the brand—helped solidify Balenciaga’s presence in popular culture.
Kering CEO François-Henri Pinault acknowledged Gvasalia’s impact, stating, “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.”
Kering (PPRUF), a French multinational luxury group, owns some of the world’s most prestigious fashion brands, including Yves Saint Laurent, Gucci, Balenciaga, Bottega Veneta, and Alexander McQueen. Despite its status as a leading luxury conglomerate, the company has not been immune to the industry’s struggles.
According to Kering’s 2024 annual report, revenue declined by 12% compared to the previous year, with Gucci experiencing a 23% drop, making it the least profitable brand in the portfolio.
In response, Gucci selected Gvasalia as its new artistic director, hoping he can revitalize the brand as he did in his previous role.
Despite his extensive experience in luxury fashion and a modern understanding of contemporary fashion culture—attributes that helped Balenciaga achieve megabrand status—Gvasalia’s controversial past presents a potential risk to Gucci’s reputation.
In 2022, Balenciaga released two advertising campaigns that triggered widespread backlash and led to a major brand crisis.
The first, titled the “Gift Shop” campaign, featured portraits of children holding teddy bear handbags dressed in fishnets, leather harnesses, and bondage-style accessories.
The second, the 2023 Garde-Robe campaign, included images of celebrities such as Nicole Kidman, Bella Hadid, and Isabelle Huppert posing in an office setting, where court documents and images referencing child exploitation were visible in the background.
These campaigns sparked allegations that Balenciaga was involved in inappropriate and exploitative imagery, leading to widespread boycotts and criticism of the brand.
As Gucci moves forward with Gvasalia’s appointment, the luxury industry will be watching closely to see whether his creative direction will restore the brand’s prominence or bring further controversy.
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