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 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.

Said Gucci CEO Stefano Cantino in the statement, “I have always admired Demna's creative approach, that is both unique and powerful. His ability to honor the iconic legacy of a brand while embracing a modern sensibility is extraordinary.”