Kering SA appointed Balenciaga designer Demna Gvasalia to oversee a makeover of its struggling Gucci fashion label, disappointing investors who had expected a high-profile external hire.

Kering lost around $3 billion in stockmarket 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 as chief designer.

The French luxury-goods company named Demna Gvasalia as the new artistic director of its flagship label Gucci, as the group seeks a brand turnaround amid a challenging market backdrop for luxury names.

Demna has a strong viewpoint ... which is the secret sauce for a brand like Gucci,” Bernstein SG analyst Luca Solca said.

Italian luxury brand Gucci has appointed Georgian designer Demna as its artistic director, owner Kering said on Thursday, as it tries to revitalise its struggling flagship label and stop a slide in sales.

Shares in Kering sank, after the French fashion conglomerate named the provocative designer Demna as artistic director of Gucci, its largest brand. Kering stock recently stood more than 13% lower, putting the shares on course for one of their biggest one-day drops on record,

Kering shares dropped a significant 12% on Friday morning, following the announcement of Demna’s appointment at Gucci on Thursday afternoon.

PARIS (Reuters) - Kering shares tanked on Friday morning after the group led by Francois-Henri Pinault chose to bet on subversive in-house talent Demna to reinvigorate its Gucci label rather than hiring a big-ticket name from fashion's overheating job market.

Kering lost around $3 billion in stockmarket 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 as chief designer.