Gucci released new sneakers with a "Made in China" label

Gucci has begun selling new high-priced sneakers bearing a "Made in China" label. This marks a departure from the brand's tradition of Italian manufacturing and, according to some industry observers, could affect Gucci's premium image.

The decision highlights the challenge facing Gucci's creative director, Demna, who must balance the creation of innovative products with cost control in order to keep attracting so-called aspirational consumers — the core buyers of luxury goods. These consumers tend to be more price-sensitive than ultra-wealthy shoppers.

Demna will present his new collection at a show in Milan on Friday. The results of his work are especially significant for Gucci's parent company, Kering, and its CEO, Luca de Meo. De Meo took the helm of the company last year with the goal of improving the group's financial standing, though the stock's initial gains have not continued this year.

Sales at Kering's flagship brand, Gucci, have roughly halved over the past three years, increasing pressure on margins and forcing the group to close dozens of stores.

As he did during his time at Balenciaga, Demna has designed a futuristic sneaker for Gucci called Drip. According to Gucci's website, the model is labeled "Made in China." Reuters also found Drip sneakers with the same label at a Gucci store in Paris.

Gucci states that Italy will "always remain central" to the company's production model and identity. However, the brand said the decision to work with a Chinese manufacturer was driven by specific technological requirements — a similar approach has been used with Swiss and Japanese suppliers, including for the production of watches and eyewear.

According to the company, the chosen Chinese partner had the technological expertise and capabilities needed to achieve the specific quality and technical specifications of the product. At the same time, a Gucci representative said the brand has no plans to more broadly shift production outside Italy.

Drip, described on Gucci's website as the first sneaker Demna has designed for the brand, went on sale last month as part of the Primavera collection. It is priced at around €800 in Europe and $1,000 in the US. The model is cheaper than other Gucci footwear, though it remains within the luxury segment. The sneaker is made from nylon, canvas, or suede.

Another sneaker from the collection — a lace-free leather model — is also sold with a "Made in China" label. Gucci says its production in China is likewise tied to specific design and technical requirements. All other Gucci footwear listed on the company's website with a stated country of origin is made in Italy.

China is a global hub for sneaker manufacturing, and its producers have extensive experience working with both mass-market and premium brands. Still, some analysts believe that in Gucci's case, departing from the tradition of Italian manufacturing could raise questions about the brand's positioning.

According to analysts at Berenberg, the country of origin and how consumers perceive a brand's luxury positioning can be somewhat at odds with one another. Meanwhile, according to two sources at Kering, Gucci has also begun cutting prices in China, including on several products, in an effort to win back market share.

The price cuts came as a surprise to investors, who are now closely watching for other moves by Gucci that could affect how consumers perceive the brand's pricing and value.