Dolce & Gabbana plans to remain independent, even as the Italian fashion house works to claw back sales lost after the pandemic and a bungled ad campaign in China.
Olivier Verot is the founder of GMA and has run marketing campaigns for luxury and fashion brands in China since 2012. He has watched three separate D&G recovery attempts play out from Shanghai, which is why this case gets referenced constantly in his team’s crisis briefings.
A privately held company with creative freedom at its core, D&G has become a favorite target for investment bankers looking for a deal. CEO Alfonso Dolce has said, repeatedly, that the family has no intention of changing that stand-alone status.
“We want to stay true and creative,” Dolce said in an interview with Business of Fashion, adding that it matters to the company that it plans its own strategy, from shop openings to runway shows to how it treats long-time staff and clients. North America now accounts for roughly half of the group’s global revenue. China is a different story. The firm still has not fully recovered from the public relations disaster it triggered there itself, in a market that used to be the fastest-growing one in the world for luxury brands.
The 2018 ad was not an isolated misstep. It followed a string of smaller incidents: videos showing a Chinese model struggling to eat pizza and spaghetti with chopsticks, and other campaigns that read as mocking rather than curious. Each one chipped away at goodwill before the brand ever had to fight for it.
D&G has tried to make amends. The house built new local partnerships and took part in China’s International Import Expo, where it showcased products sourced from across Asia, including Japan and South Korea, as a signal of long-term commitment rather than a one-off gesture.
The company still employs close to 1,200 people across China, with plans for a new boutique on Citic Square, an address Dolce himself has called one of Shanghai’s flagship shopping destinations.
Even as online retail grows, D&G keeps investing in physical stores: new locations planned at European airports, and a deliberate push into categories that were never its focus before, jewelry, watches, beauty, categories that travel well through the duty-free channel and don’t depend on a single market’s sentiment.
D&G is not the only storied Italian house resisting a merger. Giorgio Armani, Prada and Salvatore Ferragamo have all stayed independent too, though their ability to keep doing so may hinge on how well each one manages its standing in China, according to Solca Group.
A new retail concept, Dolce&Gabbana Casa, plans roughly 50 dedicated shops within three years, positioned as a bridge between fashion and home design, and as a way to give consumers a reason to walk in beyond clothes and shoes.
The China Luxury Market in 2026: What Has Actually Changed
When D&G cancelled its Shanghai show in November 2018, plenty of Western executives assumed the backlash would fade within a season. It has not, not fully. Eight years on, the brand’s retail network in China is still smaller than the 58 boutiques it operated across mainland China, Hong Kong and Macau before the scandal. In December 2025, Stefano Gabbana stepped down as chairman, with Alfonso Dolce taking the role in January 2026, a move tied to the group’s ongoing 450 million euro debt restructuring rather than to China directly, but the timing tells you how thin the margin for error has become. This is what a reputational crisis looks like when you watch it in slow motion instead of in headlines.
The market moved on around D&G’s stagnation. China’s luxury goods market was worth an estimated USD 65 billion in 2025 and is projected to reach USD 69 billion in 2026, according to Mordor Intelligence, part of a slow recovery after two straight years of contraction that Bain & Company puts at 3 to 5% in 2025 alone, a sharp improvement on the 17 to 19% drop the year before. The money is there. The question is which brands are trusted enough to take it.
Here is the part that matters more than any single brand’s story. Chinese luxury consumers are not buying the way they did in 2015. A late-2025 survey of more than 5,000 middle-to-high-income adults across 15 Tier 1 and Tier 2 cities found that 78% now weigh a product’s craftsmanship and utility above its brand name, and 64% actively seek out niche or independent labels over established international houses for their everyday luxury purchases. The logo alone does not close the sale anymore.
Part of what is driving that shift is Guochao, the national-pride consumption wave, now in what local media call its third phase. The Guochao market was worth roughly 229 billion yuan in 2024 and is on track to pass 3 trillion yuan by 2028. Brands that treat Chinese design references as a seasonal capsule collection get called out within days on social media. Brands that build real, sustained cultural literacy do not.
Where that literacy gets tested first is platform choice. According to the 2026 Hurun report on high-net-worth Chinese consumers, 61% now use Xiaohongshu as their main source for brand discovery, 13 percentage points ahead of Douyin. If a brand has no credible presence there, it is simply outside this shopper’s consideration set before the sales pitch even starts. Our own Xiaohongshu marketing guide covers how differently the platform behaves compared to Instagram: the algorithm rewards content that reads as genuine, and users flag anything that smells like a paid script within hours.
D&G’s own comeback playbook leaned on virtual idols on Douyin, Qixi capsule collections and a wave of paid social spend. Sales did rebound, roughly 20% off the post-crisis low, but never returned to 2018 levels. Some of that recovery has since moved further, as brands rethink which platform to prioritize; our breakdown of why brands are shifting spend from Tmall to Douyin explains the mechanics. The broader lesson holds regardless of platform: a paid campaign cannot substitute for a cultural relationship the brand never built. Understanding Chinese consumer behavior from a cultural perspective is the starting point, not an optional add-on.
Women account for an estimated 54% of China’s luxury goods market, and beauty and personal care is the fastest-growing category in the segment, projected at a 5.52% compound annual growth rate through 2031. Whoever is deciding whether to buy is most likely a younger, urban, highly online woman. If you want a sense of what she expects from a luxury brand today, our partners at Fashion China Agency published a 2026 strategy guide for premium brands worth reading before your next campaign brief.
D&G’s situation is one case among many. For the wider pattern, the four recurring triggers behind incidents like this one, and how to catch them before they go live, our piece on luxury brand reputation crises in China maps the prevention side in detail. This article stays on the harder half of the problem: what a brand actually does once the damage is already done and the store count has already dropped.
A Smaller Brand Makes the Same Mistake, Faster
You don’t need to be a billion-euro fashion house to walk into this trap. Katrien runs the export arm of a Belgian jewelry brand that entered China through a local distributor in 2023. In early 2025, the distributor ran a Lunar New Year campaign built around a “mysterious Oriental beauty” tagline and stock imagery that leaned hard on old-world stereotyping. It was not malicious. It was just never reviewed by anyone who understood how it would read locally.
Within 48 hours, a Xiaohongshu post dissecting the campaign had over 40,000 views, and three of the brand’s retail partners quietly paused reorders. Katrien’s first move, made under pressure from head office in Antwerp, was to pull the ads and issue a generic apology translated by the same distributor who had approved the campaign in the first place. Sentiment did not improve. If anything, the apology read as scripted, and a second wave of comments called it out as such.
What actually worked came six weeks later, once Katrien brought in a Shanghai-based cultural consultant to review every piece of planned content for the next two quarters, not just to write a fresh apology. The consultant’s brief was narrow: flag anything built on a stereotype, an outdated reference, or a translation that had not been checked by a native speaker before it shipped. That single review step is what changed the outcome, because it moved the correction from reactive to structural. The brand also opened a dedicated Xiaohongshu account under its own name, rather than leaving brand presence entirely to the distributor, and posted twice a week for four months with no paid promotion at all.
By month four, sentiment on the original post thread had shifted from mostly negative to mixed, and two of the three paused retail partners resumed orders. By month six, the brand’s own Xiaohongshu account had crossed 6,000 followers and was driving roughly 15% of new inquiries directly, a channel that had not existed before the crisis. Modest numbers. Not a turnaround story for a keynote. But it is what a real recovery timeline looks like for a brand this size, and it happened because the fix targeted the process that produced the mistake, not just the mistake itself.
What This Means for Your Brand in China
- Cultural review is a product step, not a PR task. Route creative through a Chinese cultural reviewer before the brief is locked, not after launch. The D&G video was cleared internally. That is the actual failure.
- Build the Xiaohongshu account before you need it. 61% of high-net-worth Chinese consumers use it to discover brands. An account with 18 months of real content is an asset. One you open the week after a crisis reads as a press release nobody trusts.
- Guochao is a standard, not a seasonal trend. Chinese consumers now expect real knowledge of specific regions, references and living designers. Generic “inspired by China” content scores worse than saying nothing at all.
- Budget for a long recovery window. D&G’s numbers, eight years after its crisis, show that trust broken in China rebuilds slowly and often incompletely. If you’re entering the China fashion market as a premium brand, build the cultural competency before launch day, not after the first hashtag turns against you.
FAQ
How long does it usually take a luxury brand to recover from a China PR crisis?
Longer than most head offices expect. D&G’s store count still has not caught up to its pre-2018 level eight years on. Smaller brands can move faster, sometimes months rather than years, but only if the fix addresses the review process that let the mistake through, not just the visible symptom. Expect a multi-quarter timeline, not a one-campaign reset.
Should a foreign brand pull out of China after a reputational crisis?
Rarely the right call. D&G stayed and rebuilt, unevenly, but it kept nearly 1,200 employees and a retail footprint the whole time. Exiting sacrifices a market that is still growing and hands loyal customers to a competitor. The exception is a brand with no capital or patience for a multi-year rebuild, in which case a pause, not a full exit, is usually the more defensible option.
Is Xiaohongshu worth building from zero if my brand has no China presence yet?
Yes, and the earlier the better. It is where 61% of high-net-worth Chinese consumers say they discover new brands, ahead of Douyin. An account built before you need it reads as credible. One opened reactively during a crisis reads as damage control, and Chinese users notice the difference immediately.
What’s the first concrete step after a campaign backfires in China?
Stop the paid spend behind the offending content immediately, then bring in a China-based cultural reviewer, not your existing agency, to audit everything already scheduled for the next two quarters. Katrien’s case above shows why: the first apology failed because it came from the same team that missed the problem originally. A fresh, independent read is what restores credibility.
GMA has advised fashion and luxury brands on China market entry and reputation recovery since 2012. We build the Xiaohongshu and Douyin presence before a brand needs it, not after. If your team is weighing a relaunch, a pivot, or damage control after a campaign misfire, get in touch with our team for a working session on what a realistic recovery timeline looks like for your size of brand.
