For the first time in a long time, there’s a sense of flux in the luxury fashion industry. Gucci, once the undisputed leader of Kering’s portfolio, is at a crossroads, caught between shifting consumer preferences, a changing creative vision, and the financial repercussions of brand misalignment.

Gucci’s sales plunged 24% in Q4 2024, contributing to a 51% drop in operating income over the full year. Kering’s shares have fallen 38% in the past 12 months, underperforming peers like LVMH and Hermès. All of this has been accompanied by a rapid change in creative leadership. Just weeks after the abrupt departure of creative director Sabato De Sarno, Kering announced that Demna Gvasalia — known professionally as Demna — would take the helm at Gucci, moving over from Balenciaga after nearly a decade at the brand.

Gucci’s crisis: a cautionary tale in brand communication

Demna’s appointment should have been a moment of optimism. Instead, it triggered fresh concern: Kering shares fell 12% the day the announcement was made, as investors questioned whether he was the right fit. Despite his commercial success at Balenciaga, where he revitalised the brand with a streetwear-meets-couture aesthetic, there is scepticism around whether his style aligns with Gucci’s needs at this critical moment.

Analysts at UBS and Bernstein flagged reputational risks and investor disappointment, particularly in light of the backlash to a controversial Balenciaga campaign in 2022. One analyst described the move as “a 5/10”, while another noted that expectations had been set for a high-profile external hire — not an internal transfer.

Yet amid the noise, the real question is: what does this mean for Gucci’s brand?

Because for a luxury house, that’s where its real value lies.

Gucci’s brand identity: lost in translation

Gucci’s rise during the late 2010s, under Alessandro Michele, was as much about brand storytelling as it was about design. His maximalist, eclectic aesthetic gave Gucci a clear and distinct identity that resonated with younger consumers, helping sales soar to over €10bn. But when trends evolved, Gucci shifted to De Sarno’s quieter, more commercial minimalism — a move that created confusion. The core Gucci audience, drawn in by bold design, felt alienated. And the new, more muted look struggled to stand out in a market already dominated by understated luxury leaders like Hermès and Bottega Veneta.

As one retailer put it: “If you saw it for £100 at Zara, you’d buy it. But there was nothing that warranted the price tag” (FT).

Why brand communications matter

Luxury thrives on perception, and perception is built through strong, consistent messaging. When a brand like Gucci shifts direction without a clear narrative, it risks losing the very thing that makes it valuable: its identity.

Here are three takeaways:

1. Brand consistency is key – Rapid repositioning confuses consumers and erodes loyalty. Change needs to feel like evolution, not abandonment.

2. Luxury pricing requires storytelling – Consumers will pay £3,500 for a jacket if they believe in the brand story. Without that narrative, price becomes the problem.

3. Creative director changes need framing – Appointing a new designer isn’t just a business decision. It’s a message to the world — and that message must be clear, confident, and strategic.

So, what’s next for Gucci?

Demna won’t take up the role until July, and the first signs of his influence may not appear until well into 2026. Analysts are bracing for another tough year, with HSBC warning that even the most successful turnaround could take up to three years to bear fruit.

In the meantime, the spotlight is on Kering’s ability to manage the narrative — to clearly define what Demna’s Gucci will look and feel like, and why it matters. Because if consumers and investors don’t understand the story, they’ll look elsewhere.

And that’s the bigger lesson. Whether in luxury, finance, tech or consumer goods, brand communications should never be an afterthought. A strong brand isn’t just aesthetic — it’s strategic.

If you’re thinking about how to strengthen your brand’s communication strategy, get in touch with Cardew Group’s Consumer Team. Because in today’s market, a strong brand isn’t just a nice-to-have — it’s the difference between growth and decline.