Kering Shares Fall 12% After Demna's Gucci Appointment
Analysts called Demna a “risky pick for much larger label Gucci with its reputation for timeless elegance.”
Kering shares dropped a significant 12% on Friday morning, following the announcement of Demna’s appointment at Gucci on Thursday afternoon.
According to Business of Fashion, several analysts stated that Demna was a “risky pick for much larger label Gucci with its reputation for timeless elegance.” Insiders at Jeffries said that the designer’s move came as a surprise, and J.P. Morgan analysts called it a “controversial choice.”
“We think that at this stage, the announcement brings as much risks as opportunities,” analysts at Barclays told the outlet, noting that selecting Demna over safer candidates, like Hedi Slimane or Pierpaolo Piccioli, was an “attempt to make the label a global trend setter again.”
In any case, Gucci needed to shake things up in the wake of Sabato De Sarno’s exit last month. In the fourth quarter of last year, the label reported a staggering 24% revenue decrease, while De Sarno’s more practical design aesthetic struggled to drive consumer demand amid a luxury slowdown.
In order to find success, Demna will need to effectively combine his famously provocative fashion taste with Gucci’s elevated style to incite shoppers to spend across Europe, the United States, and China, where the brand has struggled to make sales since former creative director Alessandro Michele’s departure three years ago.
For more on that, read our exploratory feature: “Can Demna Be Gucci’s Hero?”
