(BFM Stock Exchange) – The action of the luxury group takes off on the Paris Stock Exchange while, according to press information, Luca de Meo, who has just announced his departure from Renault, will take over the management of the group. The market appreciates.

Luca de Meo, the right profile to straighten Kering? The market appreciates. The action of the luxury group increased by 9.8% around 10:40 am, this Monday, June 16, signing the strongest increase in CAC 40.

This increase in the title occurs when Le Figaro reported on Sunday that Luca de Meo, current director general of Renault, was going to join the mother house of Gucci and Balenciaga and leave the manufacturer in the diamond. Luca de Meo would take over the general management of Kering while François-Henri Pinault would remain chairman of the board of directors.

Contacted by News Bulletin 247, Kering did not comment. Sunday evening, Renault announced the departure, July 15, of Luca de Meo, specifying that he would take up “new challenges outside the automotive sector”.

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Seeing Luca de Meo, a “Car Guy” (an automobile enthusiast), taking the head of Kering is enough to surprise at first. The affable Italian leader has spent his entire career in the automobile at Renault but also at Volkswagen and Fiat. He has no luxury experience.

But, unlike other leaders in the sector, Luca de Meo’s main asset remains his marketing approach more than his technical knowledge (he is not an engineer). He also has a certain penchant for luxury.

“We knew the affinity of Luca de Meo for the luxury sector, in particular his passion for complicated Swiss watches (complications in watchmaking being functions other than the time display, editor’s note) which we had discussed with him at the end of an event organized at the Renault workshop on the Champs-Élysées, in Paris, in March 2022”, explain analysts in the Bernstein. “It is not difficult to imagine how the opportunity offered by Kering must have intrigued it,” they add.

“Kering needs change”

If his appointment awaits to be formalized, analysts react rather positively to the press information which send him to the head of Kering.

“His experience in the recovery of a French company will be particularly useful in Kering, in our opinion, which has struggled to stabilize its activities in recent years, the emphasis being more and more recently on the gaps in terms of leadership and governance,” writes in a Royal Bank of Canada note.

“We assume that Luca de Meo will be the spearhead of the company and that as a timeide (person hitherto external to the company), he will be more inclined to make difficult decisions and to strengthen the management team made up of the Deputy Directors General (Jean-Marc Duplaix and Francesca Bellettini) and the financial director (Armelle Poulou), all appointed to the company.”

Luca Solca, flagship analyst of the luxury sector at Bernstein, writes that “Kering needs change while his performance continued to deteriorate”. “We had the feeling that it was advisable to increase the experience and notoriety of senior executives,” he adds.

The analyst appreciates his good assessment in terms of business recovery (Renault, but also Seat before) and notes in passing the strong points of the manager.

“Brand management and marketing are its strengths, which corresponds to what the luxury industry does, for which it seems passionate,” highlights Luca Solca.

Some questions remain on his career, however. “We are wondering if he has the necessary experience in the luxury sector, despite his well -expanded curriculum vitae in terms of strategy and recovery,” Pointes Royal Bank of Canada.

Gucci in a (very) bad pass

“Monsieur de Meo will certainly bring a new management to the company and, which is very important, a new look at his difficulties. He should not refrain from making significant changes, he will also bring a proven talent for marketing and should be comfortable in a group of which a large part of the activities are based in Italy. That said, he has no experience in the field of luxury and his choice is a total surprise for the opening period Group “, develops Oddo BHF.

“It is not certain at this stage that the arrival of Luca de Meo quickly translated into new measures for Gucci, but we could later expect a new approach involving staff changes,” continues the design office. The broker believes, however, that one of the first actions that the Italian leader could take would be to act to reduce the debt lever of the company before this ratio “puts the group in danger”.

“The future will tell us if he manages to adapt and be effective in a sector of activity” than the automobile, Luca Solca de Bernstein. But for the analyst the appointment of De Meo “appears as a” positive element “. This, because his appointment would answer” several questions in the minds of investors, including the separation of the functions of president and general manager “.” A titanic challenge expects Meo “, he warns nevertheless.

Kering has been going through a very difficult pass for at least three years now, marked by the growth breakdown of its Gucci flagship brand, which represents around 40% of its sales and 50% of its current operating result.

Last year, sales of Italian label dropped by 21% in comparable data and was even withdrawn by more than 27% compared to 2022. The current operating profit was divided by two.

Aware that his efforts to give new life to the brand did not take, Kering appointed a new artistic director of Gucci in March. Demna, previously at Balenciaga, succeeded Sabato de Sarno.

This last appointment had gone badly on the side of investors, the title had then dropped by 10.7% following this announcement.

According to analysts, some investors hoped for a large external name like Hedi Slimane (couturier who officiated with Céline, Saint Laurent). Others noted that the sulphurous and provocative reputation of Demna did not necessarily stick to that of Gucci.