Gucci Bets on Demna Amid Market Turmoil and Tariff Tensions
If there’s one constant in fashion and finance, it’s that perception is everything. This week, announcements again proved their power to shape market sentiment, for better or worse.
Stateside, U.S. Treasury Secretary Scott Bessent acknowledged recession risks amid the economic instability driven by President Trump’s escalating trade tariffs. Recent tariffs targeting Canada and Mexico spooked investors, sending markets tumbling and highlighting how policy announcements can swiftly shift financial landscapes.
Across the Atlantic, a single designer appointment sent similar shockwaves through the luxury sector. Kering lost around $3 billion in stock market value on Friday after the group chose in-house talent Demna to reinvigorate its Gucci label rather than hiring one of fashion’s big-ticket names. Hedi Slimane, Maria Grazia Chiuri, and Pierpaolo Piccioli were all rumored as market-favored candidates for the role.
Although Demna’s groundbreaking streetwear vision revitalized Balenciaga, analysts expressed uncertainty about his ability to navigate Gucci’s heritage —particularly after Sabato De Sarno’s minimalist approach failed to resonate with shoppers.
Gucci’s performance is crucial to Kering, representing nearly half of the group’s sales and two-thirds of its operating profit. Yet the house has struggled significantly, notably with a sharp 24% revenue drop in the fourth quarter alone, heavily impacting Kering’s shares, which are down around 40% year-on-year.
Demna steps into the role at a pivotal moment, tasked not just with reversing Gucci’s decline but reshaping perceptions about his creative versatility. His signature style—a hype-driven, streetwear-centric aesthetic—cannot simply be repeated at Gucci. And he knows that.
It’s a bold gamble—one that might silence skeptics or confirm their fears.
As always, perception and announcements matter. In fashion, as in stocks, perception might not be reality—but it certainly makes reality a lot more interesting.
Warm Regards,
Kenneth Richard
Chief Impressionist
The Impression
