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Investing.com - Shares in Kering (EPA:PRTP) sank on Friday as analysts called the fashion giant’s decision to appoint Georgian designer Demna as artistic director of its crucial Gucci brand "controversial."
In early trading in Paris, Kering’s stock price had shed more than 12%.
Kering’s decision to tap Demna for the presigious role comes as the group is pushing to revitalize flagging sales at Gucci, the Italian luxury titan.
Demna, who is known only by his first name and for bringing streetwear into Kering’s smaller Balenciaga unit in 2016, will be the first non-Italian artistic director of Gucci since American designer Tom Ford more than two decades ago.
Demna previously incurred some backlash after he oversaw ad campaigns involving children, although he has still been received praise for his designs.
In a note to clients placing Kering on their negative catalyst watch list, analysts at J.P. Morgan said the choice of Demna 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."
One of the most influential designers in the fashion industry, Demna will be charged with powering sales growth at Gucci, which has accounted for nearly half of Kering’s revenue and two-thirds of its operating profit.
Still, analysts at Bernstein said they were "not really" satisfied with Demna’s appointment, arguing that more of a "heavyweight" chief designer was needed at Gucci.
With Demna not set to take up the role until July, it also remained "unclear whether his imprint on the brand will already be evident at Gucci’s September Milan fashion show,” or if investors "will have to wait until 2026,” analysts at Jefferies added.