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    Home - Luxury Goods & Services - This Week: Gucci and Shein Face Pricing Dilemmas
    Luxury Goods & Services

    This Week: Gucci and Shein Face Pricing Dilemmas

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    This Week: Gucci and Shein Face Pricing Dilemmas
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    Whats Happening: Gucci, Saint Laurent and Balenciaga owner Kering reports first-quarter results on Wednesday. The company has reported two years of sales declines, and few are expecting 2025 to have started out any better. Gucci, which drives more than half of sales and profits for the group, saw year-on-year revenue decline by nearly a quarter in the final months of 2024.

    Tariff Troubles: After announcing those results, Kering CEO François-Henri Pinault said “The transition phase is over. We’ve hit an inflection point where now we’re ready to get started again. But of course this is subject to the economic environment.” So much for that. Even once rock-solid LVMH and Hermès are missing sales targets as the economic outlook looks increasingly dire.

    The Trump administration may have paused a 20 percent tariff on European imports, but Kering’s brands will still be subject to a 10 percent global levy in their biggest market. Rival Hermès said last week it would raise prices to cover the expense, but that’s a costlier move when you’re already losing customers.

    Grim Milestone: Kering’s stock has recently traded below its price in March 2013, when the group rebranded from PPR. Shares are down by one-third since March 13, when the company announced Demna as Gucci’s new creative director.

    Purgatory: First collections for Demna’s Gucci and Louise Trotter’s Bottega Veneta aren’t expected until September. Those brands can start building hype before then. But for Kering, the best case scenario may be another lost year while it waits for Demna’s take on Gucci to hit stores.

    Bargains No More?

    SHEIN “Spring Boutique” Pop-Up Opens In Milan Shein is raising prices starting on April 25. (Emanuele Cremaschi/Getty Images)

    What’s Happening: In nearly identical notices posted last week, Shein and Temu said they would raise prices on April 25 “due to recent changes in global trade rules and tariffs.” Both companies make most of their goods in China and ship them directly to customers.

    Tariff Troubles II: Trump raised tariffs on Chinese imports to 145 percent, and closed the “de minimis” loophole that exempted low-value shipments from most duties. Free, easy passage over the US border was a big reason Shein and Temu were able to offer such a staggering variety of products at such low prices. We’ll soon learn whether it was the only reason.

    Clearance Sale: American shoppers are loading up while they can. Shein sales spiked 38 percent in early April from a year earlier, while Temu’s were up nearly 60 percent.

    Still a Bargain: These retailers will probably still seem like a bargain, especially since tariffs will force rivals to raise prices too. The danger is that, even if Shein and Temu remain the cheapest, they lose the illusion that they’re practically giving their merchandise away. It’s that feeling of getting away with something that convinces many online fast fashion shoppers to put up with slow shipping and hit-or-miss quality.

    The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.



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