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Gucci store closures, Zegna’s turnaround: China’s luxury market is experiencing a “world of contrasts”

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There was a time when simply hanging a luxury brand logo in China would guarantee sales. But now, this “easy win” scenario has completely changed.
Recently, Gucci closed its stores in Shanghai’s core business district, sending shockwaves through the industry. It is important to note that Gucci has always been one of the “barometers” of the luxury goods industry. Its contraction is a direct declaration of the fact that the golden age of the “general growth” of China’s luxury goods market has ended.
On one side is the sea, and on the other is the fire. While Gucci fell into double-digit decline and ranked last in terms of volume, Zegna, Chanel, and Ralph Lauren became new leaders. Especially Zegna, which dominated both Chinese and Western markets, became the biggest winner in this round of reshuffle.
What survival principles lie behind this “Song of Ice and Fire”? Gucci store closures, Zegna’s turnaround: China’s luxury market is experiencing a “world of contrasts”插图
I. What did Gucci do wrong?

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Once upon a time, Gucci successfully “gained popularity” with its bold and youthful design. But trends can be both a blessing and a curse. When the novelty wears off, the brand fails to establish a deep enough “moat”. Frequent creative changes fail to precipitate stable brand value. Consumers begin to feel that “spending so much money on a bag doesn’t seem worth it anymore.”
More importantly, it fell short in “operations”. When other brands were engaging in membership systems and localized marketing, Gucci’s actions always seemed to be half a step behind. In the fiercely competitive Chinese market, “being slow” is a sin.
II. Why did the winner win?
Looking at those brands that bucked the trend and rose, you will find a common denominator: their clear positioning and solid operations are astonishing.
  • Zegna: Instead of talking about trends, it talks about “top-notch fabrics” and “gentlemanly character”. This positioning, which directly targets high-net-worth men, gives it a high level of user loyalty.
  • Chanel: The classic “value-preserving” myth, coupled with the buzz brought by the new creative director, has allowed it to maintain its basic market share while capturing new traffic.
  • Ralph Lauren: It has taken the “American old money style” to the extreme, successfully selling clothes with a premium “lifestyle” through localized operations.
They no longer try to please everyone, but firmly grasp their core customer base, telling their products, services, and stories to the fullest. This is no longer a competition of “brands”, but a decisive battle of “positioning” and “operations”.
III. Where are the new opportunities?
This reshuffle is not all about “crying wolf”. Barclays predicts that the market will still achieve low to medium growth in the first quarter of 2026.
The driving force of growth has shifted to several new forces:
  • The “Ultimate Product” school: Brands like Loro Piana and Brunello Cucinelli, known as the “kings of cashmere,” use unrepeatable fabrics and craftsmanship to make the wealthy willingly pay up.
  • The “Practical Luxury” school: Local brands like Laopu Gold, as well as light luxury brands like Coach and Longchamp, have captured the public’s mentality of “doing big things with small money.” The quality is not bad, the price is more affordable, and the design can still showcase taste, perfectly filling the need of the “middle class with tight pockets but cannot compromise on quality of life.
IV. What does this mean for ordinary people?
To put it bluntly, the luxury market in the future will become more “competitive,” but it may be a good thing for consumers.
Brands can no longer rely on a logo to attract you. They have to come up with truly good design, quality, and service. Every penny you spend will be more for “value” rather than for “face.

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For the industry, the logic of growth has completely changed.
In the past, it was like “the boat rises with the water”, and everyone was sitting on the same big boat called “the Chinese market”, with everyone able to get a share. Now, it’s like “meeting on a narrow road”, and only those brands with clear thinking (positioning), swift actions (operations), and robust capabilities (product strength) can snatch the meat in their opponents’ bowls.
Although this restructuring of the landscape is cruel, it is the necessary path for the market to mature.
In conclusion
Gucci’s contraction serves as a wake-up call, while Zegna’s rise provides a reference.
In this new stage of “master vs. master”, there is no eternal king, only eternal competition. For us, the onlookers, perhaps we can make a cup of tea, watch this drama unfold, and see what will happen next.
未经允许不得转载：Galan Leather- Guangzhou Galan Leather Co., Ltd » Gucci store closures, Zegna’s turnaround: China’s luxury market is experiencing a “world of contrasts”
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