From cars to couture: Kering appoints Renault's Luca De Meo to lead Gucci; French high-fashion brand hopes for revival
French high end fashion group Kering appointed Luca de Meo, the man behind rescuing carmaker Renault from crisis, as its new chief executive to steer the company's struggling flagship brand Gucci back on course.
De Meo, 58, will officially take over in September, after shareholders approve of a new governance structure that separates the roles of chairman and CEO. Francois-Henri Pinault, whose family controls Kering's largest shareholder, will stay on as board chairman.
Kering, which owns Gucci, Yves Saint Laurent, Balenciaga and Bottega Veneta, described the appointment as 'a decisive step in the evolution of Kering's governance and strengthens the Group's leadership as it enters a new phase of its development.'
Kering's shares surged nearly 12% on reports of de Meo's imminent arrival, although the company only confirmed the news after the Paris exchange closed. In contrast, Renault shares dropped 8.7% on Sunday following the announcement that de Meo would step down on 15 July to "take on new challenges outside the automobile sector."
Luca de Meo is known for turning struggling companies around. He joined Renault in 2020 after the Carlos Ghosn scandal and helped steady the business.
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He pushed for electric vehicles and focused on more premium models. As a result, Renault avoided the slump that affected rivals and is now aiming for an operating margin of over 7% this year.
Kering is counting on de Meo to deliver a similar turnaround at Gucci, which has lost its edge in recent years. Once the group's main driver of growth, the brand's slump played a major role in Kering's 12% drop in revenue to 17.2 billion euros in 2023, while net profit plunged by 64% to 1.1 billion euros.
Over the year, Gucci's own sales fell 23%.
In February, Gucci parted ways with creative director Sabato De Sarno after a lacklustre two-year stint. In March, the group named Balenciaga's Demna Gvasalia as chief designer for Gucci, part of a wider leadership reshuffle that also included appointments at Saint Laurent and Bottega Veneta.
Analysts are cautiously optimistic about de Meo's appointment. Bernstein noted that 'Kering shares have lost 28 percent since the beginning of the year and 78 percent since its peak in mid-2021, a drop largely due to the drop in its leading brand Gucci.'
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