Kering shares down 10% after appointment of Demna as Gucci designer

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Kering shares down 10% after appointment of Demna as Gucci designer.

stock :: 8hrs ago :: source - reuters

By Reuters

The logo of French luxury group Kering is seen at Kering headquarters in Paris, France. REUTERS/Sarah Meyssonnier/File photo

PARIS (Reuters) - Kering shares tanked on Friday morning after the group led by Francois-Henri Pinault chose to bet on subversive in-house talent Demna to reinvigorate its Gucci label rather than hiring a big-ticket name from fashion's overheating job market.

Shares fell by around 10% in early Paris session trade, underperforming French luxury peers which were trading flat following the news.

Analysts at Jefferies said the appointment of the Georgian former Balenciaga designer came as a surprise, while J.P. Morgan analysts called the move a "controversial choice," citing early feedback on social media and fashion blogs and a "question mark" now hanging over the brand's creative future.

The appointment of Gucci's next design chief was the fashion world's most-awaited news in recent weeks after Gucci's fired Italian Sabato de Sarno after less than two years in the role.

The house's prolonged sales decline, including a drop in revenue by 24% in the fourth quarter of 2024 alone, has heavily weighed on Kering in past months, with group shares down around 40% year-on-year while a European sector benchmark index (.STXLUXP) was down close to 6% over the same period.

(Reporting by Tassilo Hummel; Editing by Makini Brice)