New York: Gucci will accept payments in cryptocurrencies in the US starting this month, as the luxury industry takes tentative steps into the digital-asset universe. Customers in some stores in New York, Los Angeles, Miami, Atlanta and Las Vegas will be able to pay using digital tokens from the end of May. It will adopt this payment option throughout its North American stores this summer.
Gucci, owned by Kering SA, will initially accept 10 cryptocurrencies including Bitcoin, Bitcoin Cash, Ether, Dogecoin and Shiba Inu. The company joins fashion designer Philipp Plein, whose online store started accepting crypto payments in 2021. Plein said in an interview in late April that he expects purchases made with digital tokens to surge this year, and that accepting cryptocurrencies had gained his company “a lot of new clients” in the crypto community.
Kering CEO Francois-Henri Pinault in February said Gucci and other fashion houses like Balenciaga had innovation teams looking at opportunities related to the metaverse and web3 - versions of the internet built around blockchain technology, cryptocurrencies and nonfungible tokens.
“We’re at a very precocious stage of what may happen, nothing is certain,” Pinault said at the time. The approach taken by Kering and its brands is more “test and learn” than “wait and see”, he said, adding that crypto payments have “very heavy” legal and fiscal implications. The decision to embrace crypto payments shows how luxury brands are trying to appeal to younger generations of consumers by catering to emerging trends, such as creating outfits for digital characters.
But not all luxury groups are convinced. Axel Dumas, the executive chairman of Hermes, warned earlier this year of the risk of “hype” around the metaverse, saying it could be a way to make “easy money”.
Bitcoin and cryptocurrencies started rallying in 2020 and into last year as central banks and governments unleashed unprecedented stimulus into Covid-ravaged economies. That bull market came to an abrupt end in November, as soaring inflation forced central banks to take a more hawkish stance.
Bitcoin is more than 40 per cent off its peak, and many smaller tokens have suffered even steeper declines. Among notable crypto skeptics are investment legend Warren Buffett and his longtime business partner Charlie Munger, who last week reiterated their disdain for assets like Bitcoin.
Gucci generated more than half of Kering’s revenue in the first quarter of this year. The fashion house has recently been hit by lockdowns in China, where the government has battled to contain a resurgence of COVID-19.