Kering Shares Plummet After Demna’s Gucci Appointment

Kering shares dropped sharply by approximately 10% in early trading on Friday, following the unexpected appointment of Demna as Gucci’s new artistic director. The decision, led by Kering chairman François-Henri Pinault, favored the subversive Georgian designer—previously at Balenciaga—over a high-profile external hire, rattling investors and analysts amid Gucci’s ongoing sales slump.

The announcement, ending weeks of speculation after Sabato de Sarno’s abrupt exit after less than two years, aimed to revitalize the struggling luxury label. Gucci’s revenue fell 24% in Q4 2024, contributing to a 40% year-on-year decline in Kering’s stock, far outpacing the 6% dip in the European luxury benchmark index (.STXLUXP). While French luxury peers remained steady, Kering’s bold move drew mixed reactions.

Jefferies analysts labeled Demna’s appointment a “surprise,” while J.P. Morgan dubbed it “controversial,” pointing to skeptical early feedback on social media and fashion blogs. Critics question whether Demna, known for his avant-garde Balenciaga tenure, can restore Gucci’s commercial allure, with uncertainty clouding the brand’s creative trajectory. His start date is set for July 2025, following his final Balenciaga couture show.

Kering, which relies heavily on Gucci for revenue, has faced mounting pressure to reverse the brand’s decline. Pinault hailed Demna’s “creative power” as the remedy, but the market’s immediate response suggests investor unease. As the fashion world watches, Demna’s unconventional vision will be tested against Gucci’s storied legacy and urgent need for a turnaround.