Kering CEO Change Brings New Leadership

François-Henri Pinault's leadership at Kering is a significant part of the company's history. He took over as CEO in 2004.

Under Pinault's leadership, Kering has grown into a global luxury group with a diverse portfolio of brands.

Pinault's vision for the company has been key to its success. He has been instrumental in shaping the company's strategy and direction.

In 2022, Pinault stepped down as CEO, and his son, François-Henri Pinault, took over as the new CEO of Kering.

Kering's CEO, François-Henri Pinault, is stepping down after 20 years at the helm of the luxury group.

Pinault's family founded Kering in 1962 as a timber trading company, and he oversaw a push into luxury starting in the 1990s that made it one of the biggest conglomerates in the industry.

The handover comes after Kering's yearslong efforts to revive the fortunes of its flagship Gucci brand faltered. Many luxury companies are under pressure due to a slowdown in spending on high-end products, particularly in China.

Luca de Meo, the former CEO of Renault, will take over as CEO of Kering on September 15, subject to approval from the board of directors.

De Meo has spent 30 years working in the automotive industry and helped engineer a turnaround at Renault during his time as CEO.

Kering's leadership change comes as the company continues to struggle with losses, posting a Q1 revenue decline of 14% to 3.9 billion euros in April.

Here is a brief timeline of the leadership change:

The market welcomed the new CEO with open arms, with shares rising 5 percent Monday morning after the news leaked over the weekend.

Investors and creditors have been eager for a shakeup in Kering's senior ranks, and it seems De Meo's appointment has finally brought some fresh blood to the table.

De Meo's track record in turning around a French corporate will likely be a big help to Kering, which has struggled to stabilize its business in recent years.

However, turning around luxury brands has become a complex and costly process, reflecting consumer preference for top brands rather than those in transition.

The new CEO's arrival won't delay or reset action plans put in place prior to his arrival, including efforts to lower debt levels and the aesthetic relaunch of Gucci, which is set to reveal its new design later this year.

Kering's new CEO, Luca de Meo, has a track record in turning around French corporate giants, which could be a game-changer for the struggling luxury group.

Investors and creditors have been eagerly awaiting a shakeup in Kering's senior ranks, and the market reacted positively to the news, with shares rising 5 percent on Monday morning. This is a clear indication that the industry is optimistic about de Meo's leadership.

De Meo's arrival won't delay or reset the action plans already in place, such as efforts to lower debt levels and the aesthetic relaunch of Gucci. Pinault emphasized that de Meo will have full liberty to define and execute his vision for the group.

The road ahead will be complex, as Citi analyst Thomas Chauvet pointed out that luxury brand turnarounds are now more costly and less public-market-friendly. It remains to be seen how de Meo will navigate these challenges and rejuvenate brands like Gucci and Saint Laurent.

Here's a brief overview of the key facts surrounding de Meo's appointment:

Kering's new CEO, Luca de Meo, has a background in the automotive industry, having spent 30 years working at companies like Renault, Toyota Europe, Fiat, Volkswagen Group, and Audi. He returns to Kering after a stint as CEO of Renault.

De Meo's appointment is subject to approval by the board of directors, who will vote following a Kering shareholder meeting on September 9. If approved, he will take office on September 15.

Kering's leadership change comes as the company continues to face challenges, including a 14% decline in Q1 revenue to 3.9 billion euros. Revenue fell 12% in fiscal 2024.

The company has also been working to turn around its Gucci brand, which still accounts for half of group sales and two-thirds of operating profit. Gucci's sales and profitability have tumbled since late 2023.

Here are some key dates related to Kering's leadership change and challenges:

Kering's troubles go beyond Gucci, with Saint Laurent reporting declining sales in recent quarters, albeit less drastically than Gucci's.

The market reaction to Luca De Meo's appointment as CEO of Kering has been positive, with shares rising 5 percent on Monday morning after the news leaked over the weekend.

Investors and creditors have been eager for a shakeup in Kering's senior ranks, and De Meo's arrival has been seen as a breath of fresh air. His track record in turning around French corporations is expected to be a major asset to the company.

RBC Capital Markets analyst Piral Dadhania believes De Meo will act as a spearhead for the business, making tougher decisions and adding depth to the leadership team. This is a welcome change from the current internal appointees.

However, Citi analyst Thomas Chauvet notes that luxury brand turnarounds have become more complex and costly in recent years, reflecting consumer preference for established top brands. This means there's still a lot of work ahead for De Meo and the team at Gucci and Saint Laurent.

Kering's attempts to get back on track are being met with skepticism by investors and industry observers. They believe the group needs a far more drastic overhaul than it has planned.

François-Henri Pinault, the CEO of Kering, is at the helm of this effort. However, it's unclear whether his plans will be enough to turn things around.

Luxury Editor at The Business of Fashion, Robert Williams, shares the same concerns. He's based in Paris and has a deep understanding of the luxury fashion sector.

A drastic overhaul might involve significant changes to the company's leadership, including the departure of key executives like Luca de Meo.