Ryan Wild
Appointment of Balenciaga veteran rattles Kering shares as luxury house seeks to revive flagging fortunes
On 14 March 2025, Kering, the Paris-headquartered luxury conglomerate, announced the appointment of Demna Gvasalia—the maverick creative director of Balenciaga—as the new head of Gucci’s design studio. The choice came after Gucci’s brief experiment with Sabato de Sarno failed to arrest a slide in sales, and signals Kering’s appetite for a high-profile, in-house solution rather than recruiting an external big-name designer. The news marks a dramatic shift in strategy for one of the world’s most storied fashion houses.
Investors responded swiftly, sending Kering’s shares tumbling by as much as 13 per cent in Paris trading – their largest one-day slide in nearly a year. By mid-afternoon, the group had shed close to $3 billion in market value, sparking fears that Demna’s unconventional, streetwear-inflected aesthetic might jar with Gucci’s traditional emphasis on elegance and heritage. Several equity analysts described the move as bold but risky, underscoring the high stakes involved in reviving the brand’s fortunes.
Demna Gvasalia, who goes by a single name, is celebrated for transforming Balenciaga into a global trend-setter since joining the house in 2015. Born in Georgia, he studied economics before pursuing design in Germany and Belgium, and quickly made his mark with avant-garde collections that blended utilitarian motifs with subversive commentary on consumer culture. His willingness to court controversy – from IKEA-inspired handbags to provocative ad campaigns – has defined his tenure, earning both plaudits and protest.
Gucci has endured a protracted sales slump, with revenues down by 24 per cent in the fourth quarter of 2024 alone, a decline that has weighed heavily on Kering’s overall performance. The brand’s freshly appointed chief executive, Stefano Cantino, has already overhauled management structures in an effort to reclaim market share, but consumer tastes have proved elusive, particularly among millennial and Gen Z shoppers. The departure of Sabato de Sarno in February underscored the urgency for a radical creative reinvention.
“This in-house solution might appear to have been taken in lack of better options, but is also a bold move given Balenciaga’s remarkable turnaround,” observed Ariane Hayate, European Equity Fund Manager at Edmond de Rothschild. Bernstein analyst Luca Solca questioned who will ‘drive the bus’ as Kering juggles expensive acquisitions and profit warnings alongside this creative shake-up. With Kering shares down around 40 per cent over the past year, the appointment lays bare the extent of the challenge ahead.
Industry experts caution that Demna must balance his avant-garde flair with Gucci’s heritage DNA if he is to win over retailers and customers across Europe, the United States, and Asia. In China – the label’s largest market – early reactions have been ambivalent, oscillating between curiosity and scepticism over whether Demna’s streetwear ethos will resonate with luxury-hungry consumers. Observers warn that a misstep in the Chinese market could compound existing headwinds.
Demna will officially assume the creative helm in July 2025, raising questions about whether his imprint will already be visible at Gucci’s September Milan fashion show or deferred until 2026. Kering insiders suggest that pre-show preparations are underway to accommodate his vision, though details remain closely guarded. With the Spring/Summer 2026 collection likely to be his first full-scale showcase, industry watchers will scrutinise every silhouette, fabric choice and runway moment for signs of a new chapter.
As Gucci embarks on this pivotal era, the stakes for Kering could not be higher. Success would not only vindicate an unconventional appointment but also restore confidence among investors and fashion aficionados alike. Failure, however, risks deepening the group’s share-price woes and prompting further leadership changes. With rival houses such as Louis Vuitton and Chanel keeping pace, Demna’s creative vision will play a critical role in determining whether Gucci can reclaim its status as a global beacon of luxury.
Image – DW labs Incorporated – stock.adobe.com
David jones
