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.

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.

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

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, as its new artistic director. He will be in charge of women’s wear, men’s wear and accessories.

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.

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.