French luxury conglomerate Kering announced on Monday that Luca de Meo, credited with guiding automaker Renault out of crisis, will become its new chief executive as the group seeks to revive its flagship brand Gucci.
Kering described de Meo’s appointment as a “decisive step” in its governance evolution, strengthening the leadership team as the company moves into a new development phase. The former Renault chief will officially take over in September, following shareholder approval of a restructured governance model that will separate the roles of chief executive and board chairman.
Francois-Henri Pinault, whose family is the largest shareholder, will continue as board chairman.
Kering has faced significant challenges in restoring Gucci’s fortunes, despite the Italian fashion house’s key role in generating half of the group’s total sales.
Shares in Kering surged nearly 12 percent on news of de Meo’s appointment, which was confirmed only after the Paris stock exchange had closed.
Conversely, Renault’s shares dropped 8.7 percent after de Meo announced on Sunday that he would step down on July 15 to pursue new opportunities outside the automotive sector, ending his five-year tenure.
Known for his communication skills and marketing expertise, de Meo is credited with stabilising Renault after the turbulence following the Carlos Ghosn scandal. Since taking charge in 2020, he accelerated the company’s shift towards electric vehicles and repositioned it as a more premium brand. Renault also owns the Dacia and Alpine marques.
During a conference call, Pinault praised de Meo’s passion for brand management and transformation, noting his proven leadership during Renault’s turnaround.
Despite the share price jump, Kering’s long-term investors continue to suffer losses. Bernstein analysts noted that Kering’s shares have declined 28 percent since the start of the year and 78 percent from their mid-2021 peak, largely due to Gucci’s struggles.
Kering’s sales fell 12 percent last year to €17.2 billion ($20 billion), while net profit plummeted 64 percent to €1.1 billion.
Gucci shares have dropped 23 percent in 2024, and in February the group parted ways with creative director Sabato De Sarno, whose two-year tenure failed to halt the brand’s decline.
In March, Demna Gvasalia of Balenciaga was appointed Gucci’s chief designer, alongside new creative appointments at Balenciaga, Yves Saint Laurent, and Bottega Veneta.
RBC Capital Markets analysts suggest that as an outsider, de Meo might push for tougher changes and deepen Kering’s leadership, which currently consists mainly of insiders. However, they questioned his direct experience in the luxury sector despite his strong strategic and turnaround background.
Citi analysts also highlighted that luxury brand turnarounds have grown more complex, expensive, and less well received by the public markets in recent years.
Pinault acknowledged de Meo’s limited luxury background but emphasised that he will work alongside top experts across Kering’s luxury houses.
