The news: Gucci is selling designer sneakers with “Made in China” labels, per Reuters, a move that could dilute its luxury cachet at a crucial time for the brand.

How we got here: A Gucci spokesperson told Reuters that its decision to work with a Chinese manufacturer was purely due to technical considerations, namely its ability to achieve “the performance and quality standards” the brand requires, and resembled previous partnerships with Swiss and Japanese suppliers. But whether that explanation will make sense to consumers is unclear, since many tend to associate “Made in China” with cheap, mass-produced products rather than $1,000 shoes.

There is also the possibility that the use of Chinese manufacturers, however isolated, will cause shoppers to question Gucci’s luxury positioning and, particularly, its pricing. That in turn could challenge the brand’s momentum at a crucial moment: Gucci is in the early innings of a turnaround under creative director Demna and new Kering CEO Luca de Meo. While the combination of new leadership and fresh creative direction has helped stem the sales decline, Gucci remains in a precarious position as luxury spending growth slows.

Implications for retail: For a brand like Gucci, whose luxury proposition is tied to Italian craftsmanship, offering products made in China carries reputational risk outside China. Within the country, such a play could enable the brand to earn goodwill among Chinese consumers looking to celebrate local culture and craftsmanship. But elsewhere, the move risks complicating Gucci’s fragile turnaround.

This content is part of EMARKETER’s subscription Briefings, where we pair daily updates with data and analysis from forecasts and research reports. Our Briefings prepare you to start your day informed, to provide critical insights in an important meeting, and to understand the context of what’s happening in your industry. Non-clients can click here to get a demo of our full platform and coverage.