Gucci's 'Made in China' sneakers raise questions: Can the luxury brand win back shoppers?

For Gucci, a luxury brand closely associated with Italian manufacturing, a new pair of sneakers carries a label that has drawn unusual attention: "Made in China." The €800-plus shoes, designed by new creative director Demna, have put the spotlight on how the brand is balancing manufacturing costs, product innovation and its luxury identity as it tries to win back shoppers.

The label on Gucci's futuristic Drip sneaker has raised questions among some industry watchers about whether the use of Chinese manufacturing could affect the brand's high-end positioning. The concerns come as Gucci, the flagship brand of French luxury group Kering, attempts to reverse a steep sales decline and reconnect with more price-sensitive luxury consumers.

Why the China label matters for Gucci

China is a major global hub for sneaker manufacturing, with producers supplying mass-market and premium brands. However, some analysts believe the shift away from Gucci's traditional Italian manufacturing image could create a challenge for the brand.

"We think this creates a potential tension between provenance and the luxury positioning Gucci is seeking to reclaim," Berenberg analysts said in a note.

Milan-based luxury business consultant Simon Whitehouse was more direct. "Made in China is not a good look," he said.

The debate centres on the relationship between where a luxury product is made and the value consumers attach to its brand, craftsmanship and exclusivity. For Gucci, that question has emerged as it seeks to appeal to aspirational shoppers, who account for a large share of luxury consumption but are more sensitive to prices than the wealthiest buyers.

Gucci defends manufacturing decision

Gucci said Italy would "always be at the heart of Gucci's manufacturing model and identity", but added that it had chosen to work with a Chinese manufacturer based on its technical capabilities.

"The partner selected offered the technological know-how and capabilities most appropriate for achieving the performance and quality standards we were seeking," the company said.

Gucci also said it had previously worked with Swiss and Japanese suppliers for products such as watches and eyewear. A spokesperson said there were no broader plans to shift production outside Italy.

The Drip sneaker, described on Gucci's website as "Demna's first sneaker for Gucci", went on sale last month as part of the brand's Primavera collection. It is priced at around €800 in Europe and $1,000 in the United States.

A second leather slip-on sneaker from the same collection also carries a "Made in China" label. Gucci said it was produced in China for similar technical reasons linked to the design. All other Gucci shoes carrying a country-of-origin label on the website are made in Italy.

Demna's first Gucci sneaker comes with a commercial challenge

The Drip marks a departure from Gucci's more traditional white leather Ace sneakers. Its laceless construction and sock-like shape reflect the futuristic, oversized sneaker aesthetic associated with Demna's earlier work at Balenciaga.

The sneaker is made from nylon, canvas or suede and is priced below many other Gucci shoes, though it remains firmly within the luxury category.

The product's launch comes at a critical juncture for Demna, who is due to present his latest collection at a Milan runway show on Friday. He must develop products that appeal to a broader group of luxury shoppers while helping Gucci control costs and rebuild sales.

Gucci's sales have halved over the past three years, putting pressure on margins and prompting Kering to close dozens of stores. Kering CEO Luca de Meo, who took over last year to lead a turnaround, has seen an early share price recovery lose momentum this year.

Price cuts add another layer to Gucci's image problem

The manufacturing debate also comes as Gucci reportedly cuts prices on select products, including in China, to regain market share.

Two Kering sources told Reuters about the price reductions. Barclays analyst Carole Madjo said the move surprised some investors, who are watching for changes that could affect Gucci's image among shoppers.

"Some people are wondering: should we keep buying Gucci if the price is coming down?" she said. "Having Chinese-made products could fuel the debate around the brand's price value equation."

The combination of China-made sneakers, selective price cuts and Demna's creative debut has brought renewed attention to Gucci's turnaround strategy. The challenge is not simply where its products are made, but whether the brand can deliver new designs and manage costs without weakening the luxury value that shoppers associate with its name.