Gucci proprietor Kering mentioned it was hiring Renault boss Luca de Meo as its new CEO, confirming studies that despatched its shares hovering and people of Renault to multi-year lows earlier on Monday.
The Italian, who has spent his profession within the auto business, would be the first outsider to run the corporate managed by the French billionaire Pinault household. He’ll tackle the position on Sept. 15.
The daring transfer highlights the scale of the problem in reviving the debt-laden luxurious conglomerate, buyers and business gamers mentioned.
Gucci drove years of spectacular development at Kering however the firm has struggled to reinvigorate its flagship label within the wake of the pandemic. It has additionally taken on greater than 10 billion euros ($11.6 billion) in debt, exposing it to the danger of one other credit standing downgrade.
For Renault, the sudden departure of its CEO is a significant blow. De Meo is credited with turning round the French carmaker and overhauling its two-decade strategic alliance with Nissan throughout his 5 years on the helm.
Renault introduced late on Sunday that de Meo would depart in mid-July to tackle new challenges exterior the auto sector.
Studies of his swap to Kering despatched the posh group’s shares up by practically 12% on Monday, recording their largest one-day share achieve since November 2008.
Renault shares tumbled by about 8%, in what was their largest every day decline since February 2022.
De Meo’s transfer to Kering, which has currently did not persuade inventory market buyers with its plans to show round Gucci, will mark a dramatic change on the group. Its shares have misplaced two-thirds of their worth over the previous 5 years.
De Meo will change Kering CEO Francois-Henri Pinault, who will stay as chairman.
“Hiring someone from outside the luxury sector might be seen as risky, but his profile appears well-suited to lead Kering,” Kepler Cheuvreux analysts mentioned.
“His turnaround capabilities, product-focused leadership and extensive marketing experience would be particularly valuable.”
Turnaround wants
De Meo’s shock 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 President Trump’s commerce tariffs and fierce competitors from Chinese language rivals.
A Renault spokesperson mentioned de Meo’s departure wouldn’t have an effect on the corporate’s coming mid-term strategic plan, although JP Morgan analysts mentioned they thought-about it a setback for the plan.
His monitor file suggests he could possibly be a very good match for Kering even with none expertise within the luxurious sector, some analysts mentioned.
De Meo joined Renault from Volkswagen in 2020, a yr wherein it registered file losses after a pandemic-induced gross sales hunch.
As CEO, he launched wide-ranging price cuts that lowered headcount and manufacturing capability worldwide, making Renault a smaller however nimbler firm. He additionally oversaw the reshaping of its usually tough relationship with Nissan.
“This is a personal decision and I am not running away,” de Meo mentioned in his be aware to Renault workers. “Renault Group is well-positioned for the next chapter.”
The carmaker was certainly one of only some automakers to not challenge a revenue warning final autumn. Its shares are up about 90% over the previous 5 years, making it the best-performing carmaker in Europe. Shares in rival Stellantis are up 15% over the identical interval, whereas VW shares are 38% decrease.
