A Gucci store, operated by Kering SA, in the Sanlitun area of Beijing, China, on Saturday, Oct. 12, 2024.
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Shares of Kering plunged on Friday after the company announced that Demna Gvasalia would take the reins as new artistic director of its ailing Gucci fashion line.
Gvasalia, known as Demna in the industry, joins internally from Kering-owned Balenciaga. He replaces Sabato De Sarno, whose departure was announced last month.
Shares were down 12.4% by 9:21 a.m. London time. The slide marks the company’s biggest share price decline since October 2008, according to Reuters.
“Demna’s contribution to the industry, to Balenciaga, and to the Group’s success has been tremendous. His creative power is exactly what Gucci needs,” Kering’s chairman and CEO François-Henri Pinault said in a statement.
Demna, a Georgian national and Gucci’s first non-Italian artistic director since Tom Ford, served for almost a decade at Kering’s smaller label Balenciaga. He is known for bringing streetwear into the luxury sphere.
He courted controversy in 2022 following an ad campaign featuring children with bondage-style products. One ad involved a child holding a handbag in the form of a stuffed teddy bear in bondage-style straps, while another featured papers including text from a 2008 Supreme Court ruling relating to child pornography.
The appointment marks Kering’s latest bid to turn around its main Gucci label, which accounts for around half of total group revenues but has suffered waning sales amid weaker demand from the key Chinese market.
Gucci sales plunged 24% annually in the fourth quarter to 1.92 billion euros, Kering reported last month, amid a broader 12% fall in group revenues.
Kering confirmed that Demna’s appointment will take effect from July 2025.
Speculation had been mounting that Kering may seek an external appointment to revive Gucci’s fortunes after its years of maximalist style fell out of vogue amid an industry-wide shift toward “quiet luxury.”
Writing in a note Thursday, Jefferies analysts said that the company would now need to “move at pace” to reinvigorate the fashion appeal of Gucci.
“Still, given that Demna will take up his role in early July, it is unclear whether his imprint on the brand will already be evident at Gucci’s September Milan fashion show. Or whether we will have to wait until 2026,” they noted.