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Stocktwits - French luxury group Kering (EPA:PRTP) SA (PPRUY) has named Luca de Meo its next chief executive officer, tapping the top leader of Renault SA (EPA:RENA) (RNLSY) to leverage his turnaround experience in the automotive sector for the luxury retail industry.
The appointment, announced Monday, sent Kering’s shares in Paris up 12%, their highest one-day gains since December 2008. Renault shares fell 8.7%, their most in three years.
De Meo, set to join on Sept. 15, will be the first outsider to run Kering, which is controlled by the billionaire Pinault family. Kering manages renowned fashion brands like Gucci and Balenciaga.
Current CEO Francois-Henri Pinault will step down and remain the board’s chairman.
The appointment is a significant development for Kering, which has recently struggled to keep pace with rivals such as LVMH and Hermès International.
The luxury industry continues to face headwinds from sluggish demand and pronounced weakness in the Chinese market, challenges compounded by U.S. trade tariffs that threaten to drive up costs and further dampen consumer spending.
Kering’s stock has plunged nearly 80% from its August 2021 peak, even as the company has taken on higher debt levels.
"The Group is ready for a new stage in its development," Pinault said in a statement, underscoring the company’s plan to bring fresh thinking for its brands’ revival.
De Meo’s "sharp understanding of brands" and his experience as a top executive “convinced me that he is the leader I was looking for to bring a new vision," Pinault said.
De Meo has spent five years leading Renault after earlier roles at Fiat (BIT:STLAM) and Volkswagen AG (ETR:VOWG).
At Renault, he is widely credited for turning around the French carmaker and overhauling its strategic alliance with Nissan. Renault’s stock market value roughly doubled under De Meo.
So far this year, shares of Kering and Renault on the Paris bourse are down more than 16%.