Shares in François-Henri Pinault luxury fashion empire Kering fell sharply on Friday following his decision to appoint in-house talent Demna as artistic director of the group’s flagging Gucci label.
The group’s share price fell as much as 13.5% in early trading on the Paris Stock Exchange, representing a three-month low.
Kering, which also owns luxury brands Yves Saint Laurent, Bottega Veneta, Creed, Maui Jim, and Alexander McQueen, is a major sponsor of the Cannes Film Festival as well as the Women In Motion talks program and gala dinner.
Pinault further deepened his ties with the film world in 2023 with the acquisition of a majority stake in Hollywood agency CAA, by his investment firm Artémis, the portfolio of which also includes Kering, Puma, auction house Christie’s and fashion house Giambattista Valli.
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News on Thursday that Demna Gvasalia, who was previously creative director at Kering’s Balenciaga label, had been tapped as the new artistic director of Gucci, was greeted with surprise by the fashion world and sector analysts.
The designer had been credited with infusing Spanish luxury brand Balenciaga with fresh creative energy, but also courted controversy, notably with a BDSM-themed advertising campaign in 2022, featuring imagery of children in a photoshoot with bondage-styled teddy bear bags.
Demna is succeeding Sabato De Sarno, who was in the role for two years.
The Georgian-born designer is only the second non-Italian to lead the Gucci brand, which has its roots in Florence and luxury leather goods, after American designer Tom Ford, who held the position from 1994 to 2004.
Much rides on Demna making a success of his appointment.
Gucci, which accounts for just under half of Kering sales, reported a 23% drop in sales to €7.65B ($8.34B) for 2024, in figures released in February, following a 6.0% dip in 2023.
The label’s lackluster performance has been weighing on Kering’s overall balance sheet with the group reporting a 12% drop in revenue to €17.2B ($18.6B) in 2024, on a comparable basis.
Sector analysts expressed scepticism that Demna was the right choice to revive Gucci, with J.P. Morgan suggesting the choice was “controversial”.
“Based on the early feedback on social media and fashion blogs so far and indeed in our view a question mark at this point on how the brand codes will be further evolved,” it wrote in a note to clients.
The post François-Henri Pinault’s Fashion Empire & Cannes Sponsor Kering Sees Shares Plunge Following Gucci Appointment appeared first on Deadline.
