Gucci parent Kering picks Renault boss Luca de Meo – Business News
Gucci proprietor Kering mentioned it was hiring Renault boss Luca de Meo as its new CEO, confirming experiences 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 industry, would be the first outsider to run the company managed by the French billionaire Pinault household. He will tackle the position on Sept. 15.
The daring transfer highlights the scale of the problem in reviving the debt-laden luxurious conglomerate, buyers and industry gamers mentioned.
Luca de Meo, who has spent his profession within the auto industry, would be the first outsider to run the company managed by the French billionaire Pinault household REUTERS
Gucci drove years of spectacular growth at Kering however the company has struggled to reinvigorate its flagship label within the wake of the pandemic. It has additionally taken on more than 10 billion euros ($11.6 billion) in debt, exposing it to the risk of one other credit ranking downgrade.
For Renault, the sudden departure of its CEO is a main blow. De Meo is credited with turning round the French carmaker and overhauling its two-decade strategic alliance with Nissan during 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.
Reports of his change to Kering despatched the posh group’s shares up by almost 12% on Monday, recording their greatest one-day proportion gain since November 2008.
Renault shares tumbled by about 8%, in what was their greatest each day decline since February 2022.
Gucci drove years of spectacular growth at Kering however the company has struggled to reinvigorate its flagship label within the wake of the pandemic. REUTERS
De Meo’s transfer to Kering, which has currently did not persuade stock 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.”
De Meo will change Kering CEO Francois-Henri Pinault, who will stay as chairman. Pinault and spouse Salma Hayek, above. AFP by way of Getty Images
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 rivals.
A Renault spokesperson mentioned de Meo’s departure wouldn’t have an effect on the company’s coming mid-term strategic plan, although JP Morgan analysts mentioned they thought-about it a setback for the plan.
His observe file suggests he could possibly be a good match for Kering even with none expertise within the luxurious sector, some analysts mentioned.
Kering shares jumped Monday on experiences of the CEO change. AFP by way of Getty Images
De Meo joined Renault from Volkswagen in 2020, a yr through which it registered file losses after a pandemic-induced gross sales hunch.
As CEO, he launched wide-ranging price cuts that diminished headcount and manufacturing capability worldwide, making Renault a smaller however nimbler company. He additionally oversaw the reshaping of its typically troublesome relationship with Nissan.
“This is a personal decision and I am not running away,” de Meo mentioned in his word to Renault workers. “Renault Group is well-positioned for the next chapter.”
The carmaker was one of solely a few automakers to not concern 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 period, whereas VW shares are 38% decrease.
