Never has a single name destroyed so much value in such a short space of time.
Kering SA (EPA:KER) shares slumped 11% in early Friday trading after the luxury group picked Demna, Balenciaga’s creative force, to revive Gucci. Investors had hoped for a star name to steady the ship after a turbulent period.
That's €3 billion off Kering's market value, or £2.6 billion.
Gucci, Kering’s biggest brand, has been in freefall, with sales plunging 24% in the last quarter of 2024.
Demna, known for his streetwear-inspired, often provocative designs, is seen as a gamble for a label famed for timeless luxury. JP Morgan, cited by Reuters, called the appointment "controversial", while analysts questioned Kering’s broader strategy.
While Demna’s edgy style made Balenciaga a hit, Gucci’s broader appeal may demand a different approach. Some fear it could take years to see his influence on the brand.
The move is the latest in a wave of designer shake-ups in luxury fashion, with Versace, Valentino, and Fendi also undergoing leadership changes.