Francois-Henri Pinault, chief executive and controlling shareholder of Gucci parent Kering SA, said the Italian fashion house didn't have teams in place to ensure that designs and marketing material don't offend the African-American community.
"We didn't understand the sensitivities of the African-American community, which is reflected in that mistake," Mr. Pinault told reporters at Kering's headquarters. "We can't be content with saying we're sorry."
Comment: Leftists won't be content with your apology anyway.
The controversy over Gucci's sweater shows how quickly a brand's missteps can be amplified on social media, harming its reputation. A wave of comments on Instagram and Twitter last week pushed Gucci to pull the item, a black sweater that covers the lower half of the face, with bright red lips surrounding a cutout of the mouth.
Global brands have been struggling to navigate cultural sensitivities across dozens of countries, a minefield that can be set off by criticism from a few influential social-media accounts. Dolce & Gabbana canceled a fashion show in China last year after social-media accounts said a publicity campaign, featuring a Chinese woman attempting to eat pizza with chopsticks, was racist.
Adidas AG said it would remove a sneaker from its collection commemorating Black History Month, after the shoe's appearance was criticized for being solid white. A Change.org petition began last month urging Nike Inc. to recall one of its Air Max sneakers, saying the logo on the sole resembles the Arabic for 'Allah. Nike said the resemblance was unintentional and kept the shoe on the market.
Mr. Pinault said black Americans represent a blind spot on Kering's cultural-sensitivity radar. He said the company, which also owns Saint Laurent and Balenciaga among other labels, has teams that review products and marketing materials destined for Asian markets.
"It's true we don't do that for the African-American community, and that's a mistake," Mr. Pinault said.
The criticism of Gucci's sweater came just as blackface has become a topic of outrage in the U.S. Virginia's governor and attorney general acknowledged dressing up in blackface in the 1980s, leading to calls for their resignations.
The controversy and Gucci's response is a measure of the influence that African-Americans now wield in high fashion. Hip hop and R&B stars have become some of the most high-profile champions of European luxury brands, occupying the front rows of fashion week shows and collaborating with brands. They pepper their lyrics with references to the brands, giving them free exposure.
Gucci in particular has cultivated those relationships. Last year, it worked with the Harlem-based designer Dapper Dan to release a critically-acclaimed collection. Gucci Chief Executive Marco Bizzarri is planning to meet with Dapper Dan and other African-American leaders during a trip to New York this week to discuss the sweater debacle.
"Another fashion house has gotten it outrageously wrong," Dapper Dan said in an Instagram post. "There is no excuse nor apology that can erase this kind of insult."
For the past three years, Gucci has been one of fashion's best-performing brands. On Tuesday, Kering reported that sales at the brand rose 28% in the fourth quarter, defying slowing economic growth in China and trade tensions between Beijing and Washington.
Kering's net profit for the full year more than doubled to EUR3.7 billion ($4.19 billion), buoyed by Gucci's performance and a one-time gain from the sale of most of the shares Kering held in German sportswear brand Puma AG.
The results led Kering to boost its dividend by 75% for the year.
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