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 great Gucci reset is here. On Wednesday, the Italian fashion house named Demna, the mononymic designer who transformed Balenciaga from a niche luxury house into one of the most provocative, boundary-breaking brands of the last decade,

Kering SA disappointed investors by naming an internal designer to oversee a makeover of its struggling Gucci brand, turning to Balenciaga’s Demna Gvasalia rather than a high-profile external hire.

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.