Latest news with #DeMeo
Canada News.Net
11 hours ago
- Business
- Canada News.Net
Gucci slump, Valentino risks await Renault's de Meo at Kering
PARIS, France: Luxury group Kering's decision to tap Luca de Meo as its next chief is being seen as a daring but necessary attempt to halt a dramatic decline in fortunes at Gucci, the once high-flying French conglomerate. Sources said Francois-Henri Pinault, who has led the group since 2005, is expected to hand over operational reins to the current Renault CEO. The move comes after years of underperformance at Kering's flagship brand, Gucci, and ballooning debt from aggressive acquisitions. De Meo's track record in reviving Renault has impressed investors, but many acknowledge that restoring Kering's shine — especially Gucci's — will be an even more formidable challenge. "It's a bold move ... We now have a CEO (de Meo) who is a great professional," said Ariane Hayate, European equity fund manager at Edmond de Rothschild. "There's now a real willingness by Francois-Henri Pinault to take a step back after years of underperformance." Kering's shares surged more than 12 percent this week, and they are on track for their most significant daily gain since 2008. Analysts and investors say the appointment hints at deeper troubles across Kering's portfolio — beyond Gucci — and signals the company's intent to take drastic action. One large European investor said the group's problems "are bigger than perceived from the outside." De Meo is likely to accelerate Kering's cost-cutting plans, which include store closures, layoffs, and real estate sales. These plans aim to reduce its net debt of 10 billion euros (US$11.6 billion). Another pressing task will be steering the group's acquisition of the remaining 70 percent of Valentino. Kering bought 30 percent of the brand in 2023 for $1.9 billion, with an option to purchase the rest in 2028 — or potentially as soon as May 2025, depending on deal clauses. "Coming from outside the industry, de Meo's learning curve is going to be super steep, but at the negotiating table, he could do well," said one person familiar with Valentino. De Meo's biggest test, however, remains Gucci, which has faltered since designer Alessandro Michele's exit in 2022. Investor hopes were dented further with the appointment of Balenciaga's Demna as creative director. Despite his lack of luxury sector experience, de Meo joins a list of high-profile cross-industry leaders who have successfully steered fashion giants. Robert Polet, Leena Nair, Benedetto Vigna, and Sergio Marchionne all made similar jumps — and thrived.
Miami Herald
2 days ago
- Business
- Miami Herald
Gucci, Yves Saint Laurent owner throws out the fashion rulebook
Things are getting wild in the luxury industry. Quiet boardrooms are turning into war rooms. Legacy houses that coasted on prestige and heritage are now clawing for relevance. Once bulletproof brands are bleeding market share, losing cultural heat, and watching TikTok drive trends they can't keep up with. At the center of the storm? Kering. Related: Gucci, YSL owner pushes back on tariff threats The French luxury giant, home to Gucci, Yves Saint Laurent, Balenciaga, Bottega Veneta, and others, is unraveling. After riding high for years, Kering is now facing a full-blown identity crisis. Its crown jewel, Gucci, has lost momentum. Gen Z isn't buying in. Sales are slumping. Analysts are doubting. Investors are bailing. And leadership? Wobbling. In the past two years, Kering has lost more than 60% of its market value. Its debt has ballooned past $11.5 billion. Gucci (once its money-printing machine) is sputtering. And now, the company just made a move no one expected - one that has nothing to do with handbags and everything to do with horsepower. Kering confirmed on Monday that François-Henri Pinault will step down as CEO after nearly 20 years and hand over leadership to current Renault CEO Luca de Meo. De Meo, who officially leaves Renault on July 15, will take over as Kering CEO on September 15, pending shareholder approval. While best known as a "car guy" with stints leading Fiat, SEAT, Volkswagen, and most recently Renault, de Meo has a strong reputation for brand building and strategic turnarounds. Related: Why now may be the best time to buy a luxury watch He's credited with the revival of the Fiat 500 and the Renault 5, and is known for his deep understanding of marketing and design. In a statement, Pinault said, "His experience at the helm of an international listed group, his sharp understanding of brands, and his sense of a strong and respectful corporate culture convinced me that he is the leader I was looking for." The message is clear: Kering doesn't want just another luxury exec. It wants a visionary who can rewrite the playbook. It sounds wild. But is it really? Fashion, like auto, is about design, scale, and timing. And Kering needs a Its traditional playbook just isn't working. Gucci's creative shifts haven't landed. Saint Laurent is steady, but not enough to carry the weight. Balenciaga's controversy fatigue lingers. Meanwhile, rival LVMH is lapping Kering in nearly every category. Enter de Meo. He's not a fashion insider, but that might be the point. Kering doesn't need another luxury lifer - it needs someone willing to make hard decisions and rip off Band-Aids. More fashion: Dior suffers major loss as trailblazing designer exitsThe Birkin and LL Bean mashup you didn't know you neededPopular retailer flags major fashion trend that could save luxury fashion And with his outsider status, de Meo could have the freedom to cut deeper, move faster, and ask the questions insiders won't. De Meo is known for being strategic, brand-driven, and deeply interested in design - he reportedly has an affinity for Swiss watches and the luxury space. That gives him something rare: operational rigor and taste. If this shakeup works, it won't just reshape Kering. It could mark a new era of luxury leadership, where cultural relevance depends less on who you know in fashion, and more on whether you can actually build a brand people care about. For fans of Gucci, Yves Saint Laurent, and the future of fashion, this could be the plot twist that changes everything. Related: How an airplane vomit bag led to the iconic Hermès Birkin The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Mint
3 days ago
- Automotive
- Mint
Gucci Owner Kering Banks on De Meo's Record for a Turnaround
(Bloomberg) -- While fixing French carmaker Renault SA, Chief Executive Officer Luca de Meo pursued a hobby that would feed into his next job as CEO of Kering SA: A taste for the finer things in life, particularly Swiss watches. 'Brand management and marketing are his forte, which dovetails with what the luxury industry does — for which he seems passionate,' Luca Solca, an analyst at Bernstein wrote in a note, recalling a conversation about fine timepieces with De Meo at a Renault event three years ago. Now that De Meo has been named as CEO of the French owner of Gucci and other luxury brands, 'it is not hard to imagine how intriguing he found the Kering opportunity,' Solca said. Although De Meo has no direct fashion or consumer-goods sector experience — having spent his entire career in the auto business — luxury industry observers are betting his keen sense for what clients want and the attention to detail he displayed at Renault may be just what Kering needs. De Meo led the turnaround of Renault after taking charge of the French carmaker about five years ago, returning it to profit and growth despite substantial challenges facing the global auto industry, including an uncertain transition to electric vehicles, escalating trade tensions and the rise of highly competitive Chinese rivals. Kering shares, which on Monday recorded the biggest one-day jump since December 2008, slid as much as 2.3% in early trading in Paris. Renault, which tumbled 8.7% on Monday, was little changed. Kering, led by Francois-Henri Pinault for more than two decades, can use the help as the luxury industry weathers a slump in Chinese demand and the threat of higher US tariffs. Before the jump on Monday, Kering's stock had lost almost 80% of its value since reaching a record in August 2021 as it fell further behind rivals such as LVMH and Hermes International. The group has tried to turn around its main brand Gucci by naming new designers but the efforts have failed. Kering has also appointed new CEOs for labels including Gucci and Yves Saint Laurent in the past year. 'De Meo has a titanic challenge ahead of him' said Solca. 'Critically, investors will need to hear what it is that De Meo plans to do and digest how soon his plans can be realized. If he says 'more of the same,' then investors would (quickly) go back to where we are now. If he comes in with a vision, then it could be something else.' In addition to finding growth again at Gucci, De Meo will need to win the trust of all the teams after sweeping changes of top managers in recent years, said Ariane Hayate, a fund manager at Edmond de Rothschild Asset Management. He'll also need to tackle the group's elevated debt, which has soared over the past three years, she said. Some investors are worried that De Meo's lack of experience in the luxury industry will mean a failure to address the absence of revenue growth in a difficult industry context, according to Zuzanna Pusz, a UBS analyst. 'The concern is that the focus could potentially be on cost cutting,' she said. What the executive has going for him is the fact that he's an Italian who has worked for many years at French groups, noted Morgan Stanley analysts including Edouard Aubin and Grace Smalley. Kering's Italian Gucci brand accounts for almost two-thirds of its profit. Also, De Meo 'has a strong track record as a turnaround executive and is very well regarded within the automotive industry,' the analysts said. Renault was in crisis when De Meo — who had previously worked at Fiat and Volkswagen AG — took charge in mid-2020. The French company was coming off a record first-half loss and had announced plans to slash almost 15,000 jobs. Then, even after Russia's invasion of Ukraine prompted the manufacturer to pull out of what had been its second-biggest market, Renault vastly outperformed its European rivals and its longtime Japanese alliance partner Nissan Motor Co. 'We credit him for bringing back 'color,' energy and peak results to Renault after years of sub-par product and financials,' Jefferies analyst Philippe Houchois wrote in a note. During his tenure, De Meo inked partnerships for Renault with fashion brands such as Agnès B. His affinity for style has also been evident in his custom-made suits and his pocket squares — always impeccably folded with three or four points. A polyglot — he's fluent in Italian, French, Spanish, English and German — De Meo has authored a book entitled 'A Dictionary for Car Lovers,' showing a commitment to the emotional appeal of brands. For instance, one of the first big moves he made after taking over as CEO was to re-brand Renault's Formula 1 team as Alpine, starting with the 2021 season. Alpine, a more than half-century old French marque that Renault had revived only a few years earlier after two decades of dormancy, could become 'a mini Ferrari,' the executive boasted in October 2020. He then set out to build up the brand's scale and status. While the Alpine efforts have yet to show success in Formula 1, De Meo impressed investors by the pace of the company's new model launches. Last year, Renault introduced 10 new car models, including the Renault 5 — with accessories, including a wicker basket as baguette holder. This year, it is launching seven, including the electric Renault 4 and Alpine A390. De Meo's approach became a case study for Harvard Business School. Just how critical he considers brand building was evident at the Geneva car show last year. Even as almost all of the world's carmakers stayed away, calling car shows a thing of the past, De Meo and Renault turned up, winning a lot of attention they may not have gotten for the launch of the new Renault 5 — a car of the past that Renault modernized and launched as electric for the future. It was vintage De Meo — and helped make R5 one of the company's most high-profile new launches in recent times. De Meo is someone who has 'great brand insight but who's also able to re-energize the teams he works with and has the courage to try new things,' said Fabrizio Ferraro, professor of strategic management at IESE business school. That's crucial for Kering since 'the usual playbook of the luxury industry seems to have run out of steam,' he said. (Updates with shares in fifth paragraph.) More stories like this are available on
The Star
3 days ago
- Automotive
- The Star
Gucci turns to Renault CEO in turnaround bid
KERING SA is set to name the chief executive officer (CEO) of Renault SA as its next CEO, looking to an Italian manager who's turned around the French automaker to perform a similar role at the owner of the struggling Gucci fashion label. Luca de Meo (pic) will be appointed to the job in the coming days, people familiar with the situation told Bloomberg News, confirming a report by Le Figaro. The move follows speculation that Kering was assessing splitting the roles of CEO and chairman, which are both currently held by Francois-Henri Pinault. Pinault's father, Francois, built Kering into one of the world's most prominent luxury-goods companies, but it has struggled to keep pace with rivals such as LVMH and Hermes International in recent years as Gucci has fallen on hard times in China. Under De Meo, shares of Renault have roughly doubled. A representative for Kering declined to comment. Renault said in a statement last Sunday that De Meo had tendered his resignation and would leave the automaker on July 15. The Renault board has started the search for a new CEO, the company added. The choice of De Meo is 'a step in the right direction, it would seem,' said Luca Solca, luxury analyst at Bernstein. 'De Meo adds gravitas and experience to a company that needs it.' What's still to be seen, Solca said, is whether 'he will be able to hit the ground running and be as effective as he has been in the automotive industry.' Splitting roles The shakeup at Kering comes after its shares erased nearly 80% of their value since reaching a record in August 2021. The group has sought to turn around Gucci, which accounts for almost two-thirds of profit, by naming new designers – first in early 2023 and the latest earlier this year – but the efforts have so far failed. The group has also appointed new CEOs for various labels, including Gucci and its second-biggest brand, Yves Saint Laurent, in the past year. French magazine Challenges reported last week that Kering was considering splitting the top leadership positions, with Francois-Henri Pinault, 63, seeking to remain as chairman of the French luxury group his family controls. De Meo, 58, spent five years leading the French carmaker, after earlier roles at Fiat and Volkswagen AG. During his tenure, he inked partnerships for Renault with fashion brands such as Agnès B. De Meo brought Renault back from tough times, as the company took on state-backed loans to survive the pandemic and had to write down billions of euros on its Russian business. De Meo also loosened Renault's ties to Japan's Nissan Motor Co, with which it's had a troubled alliance of more than two decades. Once considered the alliance's weak link, Renault under De Meo leapfrogged Nissan in market value in 2024 as investors rewarded it for accelerating the development of new models, such as the electric Megane E-Tech, returning to profit and inking new partnerships with technology giants such as Qualcomm Inc. Renault, which is 15% owned by the French government, was the only major European carmaker not to issue a profit warning in 2024 and De Meo issued ambitious guidance for 2025. In recent months, Renault also has been buffered by its lack of presence in the United States, where President Donald Trump's tariffs are hitting rivals such as Jeep maker Stellantis NV hard, and in China, where car manufacturers also are suffering from cutthroat competition. 'Healthy foundation' Under the Italian executive, Renault 'has returned to a healthy foundation, boasts an impressive range of products and has resumed growth,' chairman Jean-Dominique Senard said in the statement. Pinault has led Kering for the past two decades. Under him the group, founded by Francois, 88, changed names from PPR to Kering and experienced significant growth in the initial years of Gucci designer Alessandro Michele, who took over in 2015. But Michele stepped down in 2022 after his maximalist and bohemian chic creations fell out of favour. As CEO, the younger Pinault has also been criticised for a relatively hands-off management style, Bloomberg reported last year. In late 2022, Balenciaga, another Kering label, put out an ad campaign that was seen as sexualising children, prompting a backlash. The campaign was overseen by designer Demna who earlier this year was promoted to become the artistic director of Gucci, a move that investors disapproved of. In the past few years, Kering went on an acquisition spree, buying fragrance maker Creed as well as a 30% stake in Italian fashion label Valentino. The company also splurged on prime property acquisitions but it's now seeking to sell stakes in those buildings in a bid to slash its debt. Although headquartered in Paris, Kering owns other Italian brands including leather goods maker Bottega Veneta and jewellery label Pomellato, making De Meo's appointment potentially helpful in bridging cultural divides. The appointment of De Meo will prompt questions regarding the future of two top executives under Pinault: Jean-Marc Duplaix and Francesca Bellettini, who were both promoted to co-deputy CEOs two years ago. The former is focused more on operations and finance, while the latter oversees brand development. — Bloomberg Angelina Rascouet and Albertina Torsoli write for Bloomberg. The views expressed here are the writers' own.
NZ Autocar
3 days ago
- Automotive
- NZ Autocar
Renault's CEO Luca de Meo leaves for new position
Luca de Meo, the CEO of Renault Group, has stepped down suddenly after five years in the role. Evidently he has secured a job running the firm that owns luxury brands Gucci and Yves Saint Laurent. The Italian joined the French company after a stint with Seat, during which he engineered the concept of Cupra. When he joined in July 2020, Renault was in a parlous state. Many small cars on the drawing board were replaced by more profitable SUVs. He also worked closely with Geely on EVs, the result being the wildly popular Renault 5 reboot. That's thanks largely to the 'Renaulution' business plan part of which involved the transformation of Alpine into an electric performance brand. The masterplan helped revive Renault's fortunes. The company that was haemorrhaging cash when de Meo arrived has made improving profits since 2021. De Meo's current employment will end mid-July. Meantime Renault will seek a replacement CEO 'based on the already defined succession plan'. An internal appointment seems a strong possibility. Two media outlets have reported that de Meo will be named the new CEO of Kering. It is a French holding company that specialises in luxury goods brands. Of his departure from Renault, de Meo said: 'There comes a time in one's life when one knows the job is done. 'We have a strong team and an agile organisation. We also have a strategic plan ready for the next generation of products. 'That is why I have decided it is time for me to hand over the baton.' De Meo won the prize for best automotive CEO at the 2024 Autocar UK Awards. He said that he believed he was leaving a company that was well set for the future. Renault Group chairman, Jean-Dominique Senard, described de Meo as 'an exceptional captain of industry'. He added: 'The entire company joins me in thanking him for all these years and all the collective challenges successfully met'. De Meo's departure is a surprise, given that recently he said he had no desire to leave Renault. As well as being the head of Renault, de Meo has also served as president of the European Automobile Manufacturers Association (ACEA). In that position, he advocated for a class of small European city cars to take on cheaper Chinese rivals.
