On Saturday, October 12th, 2024, the Gucci store operated by Kering SA in the San Litung region of Beijing, China.
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Stocks Kering The company plunged in on Friday after the company announced that Demna Gvasalia would take the reins as the new artistic director of the sick Gucci fashion line.
Known as Demna in the industry, Guvasalia joins internally from Balenciaga, owned by Kering. He replaced Sabato de Sarno, which was announced last month.
According to Reuters, the stock fell 10.75% by 10am in London, saving its previous loss of 12.4%.
“Dem's contribution to the success of the industry, Balenciaga and the group has been incredible. His creativity is exactly what Gucci needs,” Kering 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 nearly a decade at Kaeling's small label Balenciaga. He is known for bringing streetwear into luxury territory.
He brought the controversy in 2022 following an advertising campaign featuring children with Bondage-style products. One ad involved a child holding a handbag in the form of a teddy bear stuffed with bondage-style straps, while another featured a paper that contained texts from the 2008 Supreme Court decision on child pornography.
This appointment marks the latest bid to turn Kering's main Gucci label around. This accounts for about half of the group's total revenue, but sales are sluggish amid low demand from the Chinese market.
Gucci sales rose 24% annually in the fourth quarter to 1.92 billion euros, Kering reported last month with a 12% decline in group revenue.
Kering has confirmed that Demna's appointment will come into effect from July 2025.
In the industry-wide shift to “quiet luxury,” there has been growing speculation that Kering could seek an outside appointment to revive Gucci's fortune after the biggest style of many years fell from the trend.
In a note Thursday, Jeffries analysts said the company needs to “movement at a pace” to reinvigorate Gucci's fashion appeal.
“But still, given that Dem will take on his role in early July, it is unclear whether his imprint on the brand will already be revealed at Gucci's September Milan fashion show, or if he will have to wait until 2026,” they pointed out.
