Kering, the esteemed French luxury goods company, has appointed Demna Gvasalia, the creative mastermind behind Balenciaga, as the new artistic director of Gucci. This high-profile announcement, made on March 13, 2025, was met with significant investor disappointment, leading to an immediate fallout on the stock market.
Investors had been hoping for a more illustrious appointment from outside the company to revitalise Gucci, which has seen its sales dry up, particularly within the lucrative Chinese market. Following the news, Kering's stock saw a sharp decline of 11% during morning trading on March 14, 2025, marking a staggering 47% drop over the past year. With Gucci accounting for nearly two-thirds of Kering's profits, this lackluster performance has raised considerable concerns.
Gvasalia, who will officially take the reins of Gucci starting July 6, 2025, is tasked with reinvigoraring the brand following the departure of creative director Sabato De Sarno, whose contract was terminated just last month after two years of lackluster sales—which reported a 24% decline year-on-year as per Kering’s latest earnings report.
Francois-Henri Pinault, Kering's chairman and CEO, expressed confidence about Gvasalia's impact, stating, "Demna’s creative talent is precisely what Gucci needs." He believes the designer can breathe new life and direction back to the iconic brand, which has struggled to keep pace with competitor LVMH, particularly as luxury demand falters.
Gvasalia's track record at Balenciaga has been marked with acclaim—his designs, including the widely popular 'Triple S' sneaker, have significantly increased the brand’s appeal since he became the artistic director there in 2015. His work has often blurred the lines between high fashion and social commentary, though not without controversy. Notably, he faced backlash for Balenciaga's 2022 campaign, which featured children with teddy bears dressed in bondage-style clothing—a campaign for which he later apologized, calling it a "wrong artistic choice."
While critics warn of Gvasalia's polarizing nature, he undeniably bears substantial influence within the fashion industry, making him both an exciting and risky hire for Gucci. A fashion industry expert commented, "The Gucci brand needs to be respected and treasurable, but it also must be modernized," hinting at the necessary balance Gvasalia must strike between tradition and innovation.
Gucci’s performance over the past year has been troubling. Reports indicate declining demand, particularly devastating as it arrives on the heels of festive seasons typically ripe for luxury spending. Kering's struggles suggest potential future hurdles, as the firm faces heightened competition and shifting consumer patterns. Interestingly, amid these sales drops, other luxury brands continue to thrive, indicating the challenges Gucci faces are not industry-wide but specific to its identity and strategy.
Kering's recent financial reports have painted a bleak picture of Gucci’s future without immediate action. The company’s latest earnings report revealed Gucci’s sales fell to €77 billion, prompting renewed urgency for performance improvement. The challenge for Kering and Gvasalia alike will be to navigate the brand’s storied legacy—originally founded by Guccio Gucci more than 100 years ago—while integrating modern sensibilities and addressing contemporary consumer tastes.
Despite the recent troubles, optimism persists about Gvasalia’s influence. His avant-garde vision may provide the risk and innovation needed to steer Gucci back on course. Pinault mentioned, "Gvasalia’s controversial campaigns were seen as pivotal moments for Balenciaga," indicating the potential for similar breakthroughs at Gucci, as the brand looks to reconnect with loyal customers and attracted new clientele.
Industry insiders and analysts alike are chomping at the bit to see how Gvasalia will approach his new role and the creative direction he will implement. The anticipation is palpable, and as July 2025 approaches, the fashion world will undoubtedly watch closely as Kering looks to revitalise one of its cornerstone brands during these turbulent times.