Exclusive - Ex-Hugo Boss CEO becomes Bottega Veneta head

By Astrid Wendlandt

PARIS (Reuters) - French luxury and sports group Kering (PRTP.PA) has appointed former Hugo Boss Chief Executive Claus-Dietrich Lahrs as the new head of its Italian leather goods maker Bottega Veneta, it said on Thursday, confirming an earlier Reuters report.

Lahrs, who left Hugo Boss (BOSSn.DE) in February after eight years at the German fashion brand, joins Bottega Veneta after a year when the Italian brand's sales have dropped continuously, partly due to markdowns and weaker demand from Chinese buyers, its biggest customer base.

Lahrs is one of the luxury goods industry's best-known veterans.

Bottega Veneta is now Kering's top problem after the group succeeded in turning around Gucci much faster than many expected under the leadership of Marco Bizzarri, who was Bottega Veneta's boss for five years until 2014.

In the quarter to June, Bottega Veneta's sales in its own shops were down 11 percent. The brand is Kering's second biggest in terms of revenue behind Gucci. In 2015, it generated nearly 1.3 billion euros (£1.12 billion) in sales.

"Now that Gucci is doing better, pressure in the group has come down but Bottega Veneta remains a problem," the source said.

Lahrs, 53, earned a strong reputation for developing Hugo Boss's digital drive and retail network and spearheaded its global expansion in countries such as China.

He also drafted in designer Jason Wu to develop Hugo Boss's womenswear.

The German executive brought Hugo Boss more upmarket but in recent years, the German brand was hit hard by the luxury goods downturn and Larhs on the back of a profit warning due to weak sales in the United States and China.

Lahrs worked for several years at Richemont's (CFR.VX) Cartier and for various fashion brands at LVMH (LVMH.PA) including Louis Vuitton and at Dior (DIOR.PA) where he was in charge of haute couture.

He faces a difficult task. Bottega Veneta has been a one product brand for too many years, analysts say, having relied excessively on its weaved leather technique called intrecciato, a story which now appears to have run its course.

Several industry observers also say the brand may need a creative reboot because competition from more smaller, more innovative and exclusive leather brands is fierce and demand for luxury goods generally more subdued.

"One big question right now is the future of Tomas Maier," the source said of the designer who has been working for Bottega Veneta for more than 15 years.

Bottega Veneta will also have to clarify its market positioning: most of its handbags cost at least 1,500 euros at its shops but buyers can find them with major discounts at outlets in Italy and elsewhere.

(Editing by Alexandra Hudson/Ruth Pitchford)