Gucci is doing something luxury brands almost never do…cutting prices. And it might cost the brand its luxury status.
In May, analysts at brokerage Bernstein estimated that Gucci lowered the price of its $2,900 medium Mercato leather tote by 20% to 25%. In September, Gucci trimmed prices in China, too, including about 29% off an Ophidia mini bucket bag and about 30% off some dresses, swimsuits, and cardigans. It also plans more bags priced at €2,000 to €3,000 ($2,240 to $3,360).
Shoppers may like the lower prices. Gucci’s sales numbers show why the brand is taking the gamble. Yearly sales fell 23% in 2024 and another 22% in 2025, the third straight year of decline. Gucci is now about 40% smaller than it was in 2023.
| Period | Gucci sales | Change from a year earlier |
|---|---|---|
| 2023 | €9.87 billion ($11.05 billion) | -6% |
| 2024 | €7.65 billion ($8.56 billion) | -23% |
| 2025 | €5.99 billion ($6.71 billion) | -22% |
| 2026 through September | €4.05 billion ($4.53 billion) | about -7% |
This year, sales dropped 14% from January to March and only 3% from April to June. Then July to September slipped 4% to €1.29 billion ($1.44 billion), as fewer shoppers walked into stores, especially in mainland China. Gucci’s sales are still falling, just more slowly.
Why Gucci price cuts break luxury’s rules
Most stores cut prices to sell more. Luxury brands usually do the opposite. They raise prices, skip markdowns, and won’t sell unsold stock cheap. Some even destroyed leftovers. Burberry stopped doing it in 2018, and France has banned it for clothing since 2022.
Economists call these Veblen goods, after Thorstein Veblen. They’re things people want more when they cost more, because a high price shows status. Researchers at Switzerland’s University of St. Gallen add two more ideas. Shoppers read a high price as a sign of high quality, and many luxury buyers want what other people can’t easily get.
Jean-Noël Kapferer, an emeritus professor of marketing at HEC Paris and co-author of “The Luxury Strategy,” has a blunt rule for luxury brands.
“True luxury never offers discounts or rebates.”
– HEC Paris Emeritus Professor of Marketing Jean-Noël Kapferer
What Gucci price cuts signal to shoppers
When a luxury price drops, shoppers hear that the old price was too high. People who paid full price feel they overpaid, and new shoppers learn to wait for the next cut.
Existing owners feel it most. The St. Gallen researchers note that some luxury buyers treat purchases like investments and judge future resale value by past price moves. A lower store price can make the bag in your closet feel worth less.
Luxury brand strategist Daniel Langer says loyal clients can take a markdown personally.
“A visible markdown on an object they own converts their purchase into a penalty and their loyalty into a lesson.”
– Daniel Langer, CEO of luxury brand strategy consultancy Équité
Could Gucci price cuts cost it its luxury status?
Gucci is resetting price tags. Bernstein Global Luxury Goods Sector Head Luca Solca has said outright price cuts would hurt a brand’s image, but that big brands need more affordable options to win back shoppers. He still gave Gucci credit for taking the risk.
“Gucci has been bold to bite the bullet, even if taking higher brand equity risk.”
– Bernstein Global Luxury Goods Sector Head Luca Solca
Kapferer argues that luxury is a different category from premium, which means nice but attainable. If shoppers start treating Gucci as a brand you wait to buy on markdown, it could slide toward premium. Langer’s advice for brands in Gucci’s spot is to offer new styles at the new prices and protect what clients already own.
Sources: Kering 2025 results, Kering Q3 2026 revenue, Vogue, Jiemian News
Money Lesson
A Luxury Price Cut Reprices the Bag You Already Own
When a brand lowers the store price on a style, the secondhand market usually takes the new tag as its starting point. So if you paid $2,900 for a Mercato tote before May, its resale value is now judged against the cheaper new price.
Before you buy a luxury piece partly because it “holds its value,” check whether the brand has been cutting prices on that line or adding cheaper versions of it. And if you’re shopping Gucci now, a style that was just repriced already carries the lower number, while an untouched classic could still be cut later.
Think of us as your money-savvy best friend, not your financial adviser. This story is for information and fun, not personal advice, so talk to a licensed professional before you make any big money moves.
