Gucci owner Kering is poised to hire Renault chief executive Luca de Meo in an effort to turn around the debt-laden luxury conglomerate, five sources told Reuters, sending Kering shares soaring and Renault's to multi-month lows.
Renault announced last night that de Meo would leave the French carmaker in mid-July to take on new challenges outside the automotive sector. De Meo has confirmed the departure without saying where he is going.
But the expected switch to Kering, confirmed to Reuters by five sources close to the matter, sent the luxury group's shares up nearly 10% - on track for the biggest one-day percentage gain since March 2020.
Renault, meanwhile, tumbled by about 7% for the biggest decline since last July on the departure of the man who led the carmaker's turnaround and overhauled its two-decade strategic alliance with Nissan.
"I will soon embark on a new transformation challenge in a completely different industry; one that will require me to learn and grow once again," de Meo said in a note to Renault staff seen by Reuters.
The Italian is now set to replace Kering CEO Francois-Henri Pinault, whose family controls the conglomerate and who would remain as chairman, the sources told Reuters, confirming a report in Le Figaro newspaper.
"Luca de Meo is going to Kering," one of the sources said. It could be confirmed as early as this evening after the market close, another said.
Kering declined to comment.
"Hiring someone from outside the luxury sector might be seen as risky, but his profile appears well-suited to lead Kering," Kepler Cheuvreux analysts said.
"His turnaround capabilities, product-focused leadership and extensive marketing experience would be particularly valuable," they added.
De Meo's unexpected departure is the second top-level exit from a European carmaker in six months after Carlos Tavares resigned from Stellantis, with the sector reeling from US President Donald Trump's trade tariffs and fierce competition from Chinese rivals.
A Renault spokesperson said that de Meo's departure would not affect the company's coming mid-term strategic plan, though JP Morgan analysts said they considered it a setback for the plan.
De Meo joined Renault from Volkswagen in 2020, a year in which it registered record losses after a pandemic-induced sales slump.
He launched wide-ranging cost cuts that reduced headcount and production capacity worldwide, making Renault a smaller but nimbler company. He also oversaw the reshaping of its often difficult relationship with Nissan.
"This is a personal decision and I am not running away," de Meo said in his note to Renault staff. "Renault Group is well-positioned for the next chapter."
De Meo's track record suggests he could be a good fit for Kering, some analysts said.
Under Pinault's leadership, the group became a pure luxury player and enjoyed years of spectacular growth that was driven largely by Gucci. Since the pandemic, however, Kering has struggled to reinvigorate the brand.
It has also taken on more than €10 billion in debt, exposing it to the risk of another credit rating downgrade.
