High-end major stocks Kering It fell 13% on Friday after the company was appointed as the new creative director to revive the struggling Gucci brand. Kering, who also owns St. Laurent, Balenciaga and Bottega Veneta, has slammed Balenciaga designer Demna Gvasalia for his role, breaking through a long-standing tradition of promoting internal talent and supporting Italian leadership.
Gucci is in a massive sales recession as luxury brands from 104 years ago struggle to keep up with trendy rivals like Prada and Miamiu. Gucci’s revenue fell 24% in the fourth quarter. This is a deep cut blow for Kering, as the brand accounts for half the group’s sales and two-thirds of the operating profit.
The next designer, Gvasalia, spent nearly a decade at Balenciaga in edgy, dismantled designs and famous collaborations with celebrities like Kim Kardashian. However, his tenure was also marked by controversy. Most notably, Balenciaga’s scandal over its failed children’s marketing campaign in 2023, which caused a public backlash and a quick decline in sales.
Despite the cold reception for Wall Street rookie, Kaeling Chairman and CEO François Henry Pineau is standing by his bet. “Dem’s contribution to the success of the industry, Balenciaga and the group has been incredible,” the top executive said in a statement. “His creativity is exactly what Gucci needs.”
