Gucci owner Kering appoints de Meo as CEO, shares soar

Models wear creations for Gucci men's Spring-Summer 2016 collection, part of the Milan Fashion Week, on Monday, June 22, 2015. (AP / Antonio Calanni)

PARIS — Gucci owner Kering said it was hiring Renault boss Luca de Meo as its new CEO to help revive the debt-laden luxury conglomerate, confirming reports that sent its shares soaring and those of Renault tumbling earlier on Monday.

The Italian, who has spent his career in the auto industry, will be the first outsider to run the company controlled by the French billionaire Pinault family. He will start in the role on September 15.

The bold move highlights the scale of the challenge faced by Kering, investors and industry players said.

Francois-Henri Pinault, whom de Meo will replace as CEO, said the group’s performance over the past years had not met expectations and that Kering had reached a stage where it needed a new organization, and a new way to look at things.

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“His experience at the helm of an international listed group, his sharp understanding of brands, and his sense of a strong and respectful corporate culture convinced me that he is the leader I was looking for to bring a new vision,” Pinault said in a statement.

Pinault will remain as chairman. He said he would remain involved in strategic organization but won’t “short circuit” de Meo, who will be free to appoint who he wants to key jobs and decide on the group’s priorities.

Gucci drove years of spectacular growth at Kering but the company has struggled to reinvigorate its flagship label in the wake of the pandemic. It has also taken on more than 10 billion euros (US$11.6 billion) in debt, exposing it to the risk of another credit rating downgrade.

But Pinault downplayed any sense of crisis. “I am not recruiting a firefighter,” he told an analyst call.

For Renault, the unexpected departure of its CEO is a major blow. During his five years at the helm, de Meo is credited with turning around the French carmaker and overhauling its two-decade strategic alliance with Nissan.

Turnaround skills

Renault announced late on Sunday that de Meo would leave in mid-July to take on new challenges outside the auto sector.

Reports of his switch to Kering had sent the luxury group’s shares up by nearly 12 per cent on Monday, their biggest one-day percentage gain since November 2008.

Renault shares tumbled by about 8 per cent, in what was their biggest daily decline since February 2022.

De Meo’s move to Kering, whose plans to turn around Gucci have not convinced stock market investors, will mark a dramatic change at the group. Its shares have lost two-thirds of their value over the past five years.

“Hiring someone from outside the luxury sector might be seen as risky, but his profile appears well-suited to lead Kering,” Kepler Cheuvreux analysts said.

“His turnaround capabilities, product-focused leadership and extensive marketing experience would be particularly valuable.”

De Meo’s surprise departure is the second top-level exit from a European carmaker in six months, after Carlos Tavares resigned from Stellantis.

The sector is reeling from U.S. President Donald Trump’s trade tariffs and fierce competition from Chinese rivals.

A Renault spokesperson said de Meo’s departure would not affect the company’s coming mid-term strategic plan, though JP Morgan analysts said they considered it a setback for the plan.

De Meo joined Renault from Volkswagen VOWG.DE in 2020, a year in which it registered record losses after a pandemic-induced sales slump.

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As CEO, he launched wide-ranging cost cuts that reduced headcount and production capacity worldwide, making Renault a smaller but nimbler company. He also oversaw the reshaping of its often difficult relationship with Nissan.

“This is a personal decision and I am not running away,” de Meo said in a note to Renault staff, seen by Reuters. “Renault Group is well-positioned for the next chapter.”

The carmaker was one of only a few automakers not to issue a profit warning last autumn.

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By Mimosa Spencer and Gilles Guillaume. Additional reporting by Mathieu Rosemain, Tassilo Hummel, Richard Lough, Dominique Patton and Leigh Thomas in Paris, Danilo Masoni in Milan and Sudip Kar-Gupta in Brussels;Writing by Ingrid Melander;Editing by Catherine Evans, David Goodman and Tomasz Janowski