Gucci’s ‘Made in China’ sneakers test luxury pricing as Kering rebuilds flagship

Gucci has introduced Chinese-made luxury sneakers as creative director Demna attempts to rebuild one of the world’s best-known fashion houses while making selected products more accessible to aspirational consumers. Reuters reported on September 24 that Gucci’s Drip sneaker and a second slip-on model carry “Made in China” labels, a rare departure from the Made in Italy provenance that dominates the brand’s footwear offering. Gucci’s own online product listings confirm that multiple Drip versions are manufactured in China.

Gucci told Reuters that the decision reflected the technical capabilities required for the products rather than a broader shift of manufacturing away from Italy. The company said its selected Chinese partner possessed the most appropriate expertise to achieve the desired performance and quality standards, while a spokesperson said there are no broader plans to relocate Gucci production from Italy.

Why has Gucci chosen Chinese manufacturing for Demna’s new Drip sneaker?

The Drip represents Demna’s first sneaker for Gucci and forms part of the Primavera collection developed during his early period at the brand. Gucci describes the product as a mid-high-top design combining elements of a minimalist basketball shoe with slip-on construction, requiring a manufacturing process different from the traditional white leather sneakers long associated with the house.

China has become one of the world’s most technically sophisticated centers for athletic footwear manufacturing. Global sportswear and premium footwear brands have relied on Chinese factories for decades because suppliers possess specialized skills in molded soles, engineered textiles, bonding technologies and high-volume production.

For Gucci, however, manufacturing capability is only one part of the value equation. Luxury products derive substantial perceived value from origin, craftsmanship and storytelling, meaning a country-of-origin label can carry commercial importance far beyond the physical quality of the product.

That explains why Reuters found industry analysts questioning whether Gucci’s move could create tension with the brand’s luxury positioning. Gucci’s challenge is to convince customers that specialized manufacturing capability justifies the departure without weakening the Italian identity that helps support premium pricing.

How much do Gucci’s Made in China sneakers cost in major luxury markets?

The Drip remains firmly positioned as a luxury product despite being less expensive than many Gucci footwear models. Reuters reported that it retails at around €800 in Europe and approximately $1,000 in the United States. Gucci’s online stores show regional pricing around CHF790 in Switzerland, A$1,470 to A$1,590 in Australia depending on the model and materials, and AED4,000 for a white suede version sold in the United Arab Emirates.

That creates an intriguing consumer test. Luxury buyers paying several times the price of mainstream premium sneakers are purchasing far more than materials and manufacturing costs. They are paying for design, exclusivity, history and brand prestige.

The Made in China label therefore exposes the relationship between production cost and perceived value more visibly than usual. Chinese factories are capable of producing extremely sophisticated footwear, but luxury consumers may still associate Italian manufacturing with greater exclusivity because brands have spent decades reinforcing that connection.

Demna’s task is to ensure the design becomes desirable enough that the manufacturing location becomes secondary. His earlier success at Balenciaga demonstrated that unconventional sneakers can become cultural products in their own right when design and fashion momentum overwhelm conventional ideas about what luxury footwear should look like.

Why does Gucci need new products after sales fell sharply in recent years?

Gucci remains Kering’s most important brand, making its recovery essential to the group’s wider turnaround. Reuters reported that Gucci sales have roughly halved over the past three years, contributing to squeezed profitability and prompting Kering to close dozens of stores while reconsidering products, prices and operations.

Kering’s first-half 2026 results showed early improvement but also demonstrated how far the recovery still has to go. Gucci generated €2.76 billion of first-half revenue, down 9% as reported and 5% on a comparable basis. Second-quarter revenue of €1.41 billion fell only 2% on a comparable basis, however, representing a meaningful sequential improvement from the first quarter as newer products gained traction.

Gucci’s first-half recurring operating profit was €468 million with a 17% margin. That margin improved slightly year over year through cost discipline, but it remains far removed from the exceptional profitability the brand generated during its earlier growth cycle.

Chief Executive Luca de Meo therefore needs simultaneous progress on desirability and economics. Gucci cannot simply slash costs indefinitely because luxury brands need expensive stores, marketing, creative talent and craftsmanship, but rebuilding sales without preserving margins would also fail to repair Kering’s financial position.

Are Gucci price cuts part of the same strategy targeting aspirational consumers?

Reuters separately reported, citing two Kering sources, that Gucci has begun lowering prices on selected products, including in China, as part of efforts to regain market share. Because those details came from unnamed sources familiar with the company rather than a formal Kering announcement, the extent of the pricing strategy remains less clear than the publicly listed prices for the new sneakers.

The logic is understandable. Luxury companies expanded prices substantially during the pandemic-era boom, but those increases eventually pushed many middle-income aspirational customers out of the category. Brands are now confronting a market in which the ultra-rich can continue spending while occasional luxury shoppers are much more selective.

Gucci is particularly exposed because its previous growth depended heavily on younger and aspirational consumers. Products around €800 remain expensive, but they offer a lower entry point than multi-thousand-euro handbags while preserving enough absolute pricing power to support luxury economics.

The risk is that frequent price reductions could train consumers to question whether existing products were overpriced. Barclays analyst Carole Madjo told Reuters that some investors are already considering whether lower prices and Chinese-made products could affect consumers’ perception of Gucci’s price-value equation.

Why is Demna’s Gucci turnaround so important to parent company Kering?

Kering owns several important luxury houses, but Gucci historically generated a disproportionate share of group earnings. Weakness at the flagship brand therefore has an outsized effect on Kering’s profitability, debt reduction and investor sentiment.

The wider group returned to modest comparable growth during the first half of 2026, with revenue of €7.22 billion and recurring operating income of €921 million. Kering also reduced net debt from €8 billion at the end of 2025 to €3.3 billion by June, giving de Meo more financial flexibility while the operating turnaround continues.

Gucci’s sequential improvement during the second quarter provided early evidence that new products and merchandising changes may be helping, but one quarter does not establish a durable recovery. Demna’s collections now need to generate consistent full-price demand across China, Europe and North America.

That makes something as apparently narrow as sneaker manufacturing strategically relevant. New products must be distinctive enough to bring consumers back, economically sensible enough to protect margins and culturally aligned enough to rebuild luxury desirability.

Could Made in China become more common across the European luxury industry?

Luxury supply chains are already more international than consumer-facing labels sometimes suggest. Watches may rely on Swiss manufacturing, eyewear often involves specialist suppliers and raw materials can move through multiple countries before final assembly.

What remains unusual is putting a Made in China label on a prominent product from an Italian luxury house whose identity is closely tied to domestic craftsmanship. Gucci says the Drip arrangement does not represent a broader manufacturing shift, meaning the current products should not automatically be treated as evidence that its Italian supply chain is being dismantled.

Yet the experiment may still be watched across the industry. If consumers accept Chinese-made Gucci footwear without resistance, luxury companies could gain greater flexibility to use specialist manufacturing wherever the best technical capabilities exist. If customers react negatively, the episode may reinforce why country-of-origin branding remains unusually valuable at the top end of fashion.

Gucci is therefore testing more than a sneaker silhouette. It is testing how much of modern luxury value comes from design and brand power, and how much still depends on the words printed beside the country of manufacture.