Billionaire Pinaults Fight to Pull Gucci Off the Discount Rack

On a recent Friday afternoon, shoppers at a Gucci boutique waded through heaps of heavily discounted, past-season merchandise: Yellow pumps, furry slippers, flamboyant jackets and bright green clutches. A sale of that sort at an outlet in a nondescript suburb of Paris, near Disneyland, would be unthinkable for rival purveyors of luxury like Louis Vuitton, Chanel and Hermès.

But for Gucci, it’s the result of a muddled vision of its place in high fashion and a dysfunctional management strategy that have left its parent Kering SA struggling to stem a sharp decline in revenue while other groups in the €362 billion ($385 billion) global personal luxury goods industry remain more resilient as the sector cools down.