Shares of French luxury fashion house Kering SA surged 7% on Monday following the announcement that Luca de Meo, a veteran from the automotive industry, has been appointed as the group’s new CEO. This strategic shift is part of Kering’s ongoing efforts to revitalize its prominent yet struggling brands, including Gucci and Saint Laurent.
De Meo’s resignation as CEO of Renault was finalized on Sunday, where the company stated he left to pursue "new challenges outside the automotive sector." The news of his impending role at Kering was first disclosed by Le Figaro, a French newspaper. CNBC has reached out to Kering for confirmation, but the luxury conglomerate has chosen not to comment on the reports.
By 8:34 a.m. London time, Kering’s stock had risen by 7.2%, a reflection of investor optimism sparked by this leadership change. In contrast, shares for Renault, where de Meo had a notable tenure, dropped by 7%. Analysts from Bernstein noted that de Meo’s strengths in brand management and marketing align well with the luxury industry’s needs, suggesting a bright future for Kering under his guidance.
Having accumulated over three decades of experience in the automotive sector-serving at major companies like Toyota, Fiat, and Volkswagen-de Meo is recognized for his role in Renault’s dramatic turnaround. Under his leadership, Renault’s stock climbed over 90% in five years, raising expectations around his capabilities at Kering.
Despite the promising change in leadership, challenges remain formidable in the luxury space. Kering has recently struggled as consumers have shown a lack of interest in its flagship Gucci brand. Over the past two years, Kering’s shares have plummeted by more than 60%, largely due to multiple profit warnings and changes in design leadership at Gucci.
Current CEO and Chairman François-Henri Pinault, who has held both positions for two decades, is reportedly in the process of planning for his succession. According to unnamed sources cited by Reuters, he may separate the roles of chair and CEO, although it remains unclear if he will continue as chair.
Thomas Chauvet, a senior equity analyst at Citi, praised de Meo’s transformative approach at Renault, particularly his focus on technological innovation and brand elevation. However, he cautioned that the complexities of revitalizing luxury brands such as Gucci and Saint Laurent cannot be underestimated. "Execution of luxury brand turnarounds has become more complex, lengthy, costly, and far less public-market-friendly," Chauvet noted, emphasizing that revitalizing these brands to produce steady revenue and cash flow will require considerable effort.
As Kering embarks on this next chapter, the spotlight is on de Meo. If he can successfully rejuvenate the struggling brands within the group, there may be a significant opportunity for Kering to reclaim its position in the luxury market.
Original Source: https://www.cnbc.com/2025/06/16/shares-of-gucci-owner-kering-pop-7percent-on-reports-de-meo-will-be-next-ceo.html
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Publish Date: 2025-06-16 13:18:00
