Gucci Owner Kering Looks Set To Announce Renault CEO Its New Boss

Automaker Renault’s CEO is widely tipped to be announced imminently as the new boss of luxury group Kering, owner of Gucci, as one of Italy’s highest regraded business leaders aruably jumps from the frying pan into the fire.

Kering shares were up nearly 10% on the Paris exchange in early trading as the umbrella business that includes global fashion giant Gucci within its stable prepared to name the Renault CEO as its next chief executive.

In its bid to turnaround its fortunes, Luca De Meo is expected to be appointed to the top job in the coming days after a report on his future destination by Le Figaro on Sunday.

According to reports, the company is expected to split the roles of CEO and chairman currently held by Francois-Henri Pinault, with Pinault retaining the latter role at the French luxury group his family controls.

By contrast, Renault shares slumped as it is not yet known who will succeed De Meo, who has been credited for restoring the success at the French automotive retailer and almost doubling the value of shares in Renault.

Renault confirmed in a media statement on Sunday that De Meo had tendered his resignation and would leave the automaker on July 15.

Kering’s board has no doubt been impressed by De Meo’s actions in what, like luxury, is another challenging business sector. With Gucci as its flagship brand, Kering has been struggling to find its place in the new luxury world, which has seen a global downturn and where new, less formal brands like Farm Rio are on the rise.

In the past few years, Kering has been on an acquisition trail, buying fragrance maker Creed and amassing a stake in Italian fashion label Valentino. The company has also invested in prime real estate but is understood to be looking to divest some of its properties as it balances its books.

Gucci And Kering Shake Up

The change at the top at Kering comes after the stock has lost almost 80% of its value since reaching a post-pandemic peak in August 2021. Even after today’s bounce, the share price is still 20% below the start of the year.

The group has especially sought to turn around Gucci, which accounts for almost two-thirds of Kering’s profit, by naming new designers but its efforts have so far failed to make an impact. The group has also appointed new CEOs for brands including flagship Gucci and Yves Saint Laurent in the past year.

And luxury labels like the struggling U.K. brand Burberry have been prepared to pay top dollar to recruit leading lights to turn their fortunes around.

The 58-year-old De Meo has spent the last five years at the steering wheel of French auto giant Renault after earlier roles at Fiat and Volkswagon and Keringnwil hev been impressed by the fact that during his tenure at Renault he inked innovative partnerships with tech giants such as Qualcomm Inc. and fashion brands including Agnès B.

Pinault Leads Gucci Owner Kering

Pinault has led Kering over what has largely been two very succesful decades and under his stewardship the group, founded by his father Francois, has changed name from PPR to Kering and experienced strong growth in the initial years under the direction of Gucci designer Alessandro Michele, who took over the role in 2015.

But Michele stepped down in 2022 after his creations began to fall out of favor with an evolving luxury buyer and as CEO Pinault has also come in for some criticism over his more hands-off management style at a poimt where many luxury houses are suffering from shifting consumer behavior in the premium space.

Furthermore, in late 2022 another brand under the Kering umbrella, Balenciaga, released an ad campaign that was widely criticised for sexualizing minors and the campaign was overseen by designer Demna, who earlier this year was promoted to become Gucci’s artistic director.

That move had gone down badly with a number of investors, unlike today’s announcement which could soon see Gucci and other Kering brands under the stewardship of a boss who drove Renault back to the top.