Core Viewpoint - Gucci is facing significant financial challenges, with a 14% revenue decline to €1.343 billion in the latest quarter, marking the seventh consecutive quarter of double-digit drops. The brand's operating profit has halved to €486 million, leading to store closures and layoffs [6][7][20]. Financial Performance - Gucci's revenue has decreased by 14% to €1.343 billion, and the operating profit for the first half of 2025 has dropped by 52% to €486 million [6][20]. - The brand's revenue for the first half of 2025 fell by 26% to €3.027 billion, returning to levels seen in 2017 [20]. Store Closures and Workforce Reduction - Gucci has closed 8 stores in the third quarter and a total of 26 stores globally this year, including significant closures in China [6][7]. - The workforce has been reduced by 22% compared to its peak in 2022, indicating a substantial downsizing [7]. Leadership Changes - Luca de Meo has been appointed as the new CEO of Kering Group, with a focus on addressing Gucci's financial issues and restructuring management [9][24]. - Francesca Bellettini has taken over as Gucci's CEO, while Demna Gvasalia has been appointed as the new creative director, tasked with revitalizing the brand [9][10]. Creative Direction and Brand Strategy - Demna's first collection, "La Famiglia," aims to reestablish Gucci's narrative through innovative marketing strategies, including a film and limited-time sales [12][14]. - The new strategy emphasizes a consumer-centric approach, reducing the influence of individual creative directors on product lines, with 80% of products aligning more closely with market demands [25][27]. Market Position and Consumer Behavior - Gucci's fluctuating performance is attributed to its trend-driven nature, which can lead to instability during economic downturns [19][22]. - The brand's extensive presence in the outlet market and the prevalence of discounted products have negatively impacted its luxury image and sales [22]. Industry Context - The luxury goods sector is experiencing a downturn, with other brands like Chanel and LV also reporting declines, while Coach has seen growth by appealing to younger consumers [33][34]. - The overall luxury market is facing challenges, with consumers shifting towards brands that offer better value and emotional connection [34].