needed strategic clarity or deepen the challenges both brands face. Gucci’s identity crisis: from bold expression to uncertainty Gucci, once a powerhouse of bold self-expression and unapologetic glamour, has been struggling to maintain its relevance. Under Alessandro Michele’s tenure, the brand soared to unprecedented heights with its maximalist aesthetic, but subsequent leadership not only failed to sustain that momentum but created one of the most spectacular brand declines ever. The brand’s 180-degree turn in brand storytelling, from bold expression to muted ‘fitting-in’, paired with Sabato De Sarno’s minimalist approach, alienated clients, contributing to a 24 per cent revenue drop in Q4 2024. Kering’s appointment of Demna as Gucci’s new artistic director is an attempt to reverse this decline, but it has already raised concerns.  Demna, known for his transformative work at Balenciaga, brings a distinct aesthetic rooted in streetwear and conceptual fashion. While this approach resonated with younger audiences at Balenciaga, it also came with controversy. The 2022 advertising scandal, involving children holding teddy bears in bondage, severely and lastingly damaged Balenciaga’s reputation, a horrific shadow that still looms over Demna’s career and persona. Critics question whether his avant-garde style aligns with Gucci’s heritage of opulence and boldness. As one industry leader shared with me recently, “Hiring a one-trick pony to helm Gucci feels like a desperate move rather than a calculated strategy.” The market reaction has been telling. Following the announcement of Demna’s appointment, Kering’s stock dropped by nearly 13 per cent, wiping out another $3 billion in value, adding to the catastrophic share market value destruction over the past two years. Investors and industry experts are sceptical about whether Demna can recalibrate Gucci without alienating its core customer base. Analysts have pointed out that while his disruptive style worked initially for a niche brand like Balenciaga, it may not translate well for a global giant like Gucci, which relies on broader appeal. Gucci’s core identity has always been about empowering individuals to live boldly and unapologetically. This ethos fuelled its success during Michele’s era and even earlier under Tom Ford. The challenge now is to reconnect with this narrative while adapting to modern market demands. Appointing Demna, a designer whose aesthetic seems at odds with Gucci’s DNA, risks further diluting the brand’s identity, rather than restoring it. Strategic clarity is needed, yet this move feels more like a desperate gamble than a calculated recalibration. Versace: A shift away from bold glamour? Meanwhile, over at Versace, another seismic shift is under way. Donatella Versace’s decision to step down as creative director after nearly three decades marks the end of an era for the brand her brother Gianni founded in 1978. Under Donatella’s leadership, Versace became synonymous with bold glamour, sensuality and unapologetic self-expression – an aesthetic that resonated deeply with its audience. Her successor, Dario Vitale, formerly of Miu Miu, represents a stark departure from this legacy. Capri Holdings had signalled its intention to make Versace more “elegant” and “product-focused”, aligning it more closely with the quiet luxury trend. While this strategy aimed to attract new customers and adapt to shifting tastes in key markets like Asia, it risked alienating loyal fans who identify with Versace’s bold and brash identity. On top of this, quiet luxury has worked only for brands that were ‘quiet’ before and there are indicators that a more maximalist expression is returning. For brands, while trends are important, clarity is even more critical. And clarity has been missing at Versace for a while. Donatella herself acknowledged the significance of this transition in her farewell statement: “It has been the greatest honour of my life to carry on my brother Gianni’s legacy… I hope I have some of his spirit and tenacity.” Her new role as chief brand ambassador suggests she will remain involved in shaping the brand’s public image, but creative control now rests entirely with Vitale. Prada’s high-stakes bet on Versace Prada Group acquired Versace from Capri Holdings for €1.25 billion ($1.38 billion), closing a historic deal for the luxury industry. Versace will join Prada and Miu Miu as part of the group’s portfolio of flagship brands. The acquisition comes at a critical time: Versace has been hit particularly hard, reporting a 15 per cent drop in sales in the final quarter before the deal, and operating at a loss amid a global luxury slowdown. The price Prada paid is lower than what Capri Holdings spent to acquire Versace in 2018, reflecting the brand’s diminished equity and recent struggles. For Prada, the stakes are high. The group is betting on its ability to restore Versace’s brand equity and unlock its untapped growth potential, but the challenges are substantial. Prada’s leadership has emphasised that the journey to revitalise Versace will be long and will require disciplined execution and patience. The integration will demand investment in brand rebuilding, retail execution and operational excellence to restore Versace’s luxury credentials and distinct identity. This acquisition also raises questions about whether Versace can retain its unique voice under new ownership or if it risks becoming another brand lost in the sea of sameness in pursuit of market trends. The success of this move will depend on Prada’s capacity to address Versace’s operational and brand challenges, restore its luxury status and realise the long-term value that both management and investors are hoping to find. The risks of straying from core identity Both Gucci and Versace illustrate the dangers luxury brands face when they deviate too far from their core identities. In their pursuit of relevance or reinvention, they risk alienating loyal customers who are deeply connected to their original narratives. For Gucci, the challenge lies in staying fresh while adhering to its core values. The brand thrived when it embraced bold self-expression under Michele (and Ford) but faltered when it shifted in the opposite direction toward minimalism under De Sarno. Demna’s appointment introduces yet another radical change in direction, one that feels completely disconnected from Gucci’s essence as a symbol of unapologetic individuality. Similarly, Versace risks losing its distinctive voice by pivoting toward elegance and restraint. The brand has always celebrated boldness and sensuality. Moving away from this will, without a doubt, undermine its emotional resonance with customers who see Versace as an inspiration and expression of radical confidence and self-expression. In both cases, strategic clarity is paramount. Luxury brands succeed when they stay true to their core values while evolving in ways that are perceived as authentic and relevant. Constant pivots without a clear sense of purpose only lead to confusion, for both customers and investors. The role of leadership in shaping brand strategy Strong leadership is critical during times of transition. Creative directors are not just designers. They are cheerleaders and storytellers who shape how a brand connects with its audience. Their vision must align with the brand’s long-term strategy rather than simply chasing short-term trends. Luxury is about showing the world something it has never seen before, not imitating what everyone else does. At Gucci, Demna faces the monumental task of restoring the brand’s cultural relevance while staying true to its core values. This requires more than just a new design direction. Demna needs to restore a deep understanding of what makes Gucci unique and how that uniqueness can be expressed in today’s context. At Versace, Vitale must navigate the delicate balance of honouring the brand’s bold legacy that Gianni Versace represented and channelling it for future growth. His success will depend on his ability to create cultural buzz and making Versace a trendsetter again, rather than a follower. A call for strategic vision The leadership changes at Gucci and Versace highlight broader challenges facing the luxury fashion industry: how to evolve without losing identity, how to innovate without alienating loyal customers and how to balance short-term pressures with long-term vision. For Kering and Capri Holdings, these appointments could either revitalise their struggling brands or dramatically deepen their crises. The key will be whether these new leaders can bring strategic clarity to their roles, reconnecting their brands with their core values while charting precisely executed paths forward. In an industry driven by emotion and storytelling, losing sight of what makes a brand unique is the surest way to erode its value. For Gucci and Versace, staying true to their essence may be their most important challenge yet and their greatest opportunity for success. This story first appeared in the May 2025 issue of Inside Retail Asia magazine.