Nick Kostov
4 min read
In This Article:
PARIS—François-Henri Pinault, the billionaire heir who spent two decades transforming Kering into a luxury powerhouse, is stepping back as chief executive officer, hoping an auto-industry veteran can pull Gucci and Saint Laurent out of a slump.
Kering on Monday named departing Renault chief Luca de Meo as CEO, ending months of speculation about a possible leadership change at the French fashion group, which also owns Bottega Veneta, Balenciaga and Alexander McQueen.
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Pinault, who took charge in 2005 from his father, oversaw Kering’s shift from a sprawling retail conglomerate to a focused luxury player. The move paid off handsomely during the boom years, but it has since run into trouble.
Now, Pinault said, Kering was “ready for a new stage in its development.” He praised de Meo’s “experience at the helm of an international listed group, his sharp understanding of brands, and his sense of a strong and respectful corporate culture.”
De Meo will take the helm on Sept. 15, subject to shareholder approval, Kering said. His last day at Renault will be July 15. Pinault will remain chairman.
For Kering, the move represents a gamble at a precarious moment. Once a leader in European luxury, the group now lags behind rivals such as Hermès and Bernard Arnault’s LVMH by a widening margin.
Gucci, Kering’s biggest brand by revenue, has stumbled in China and lost ground to many competitors. Saint Laurent has also struggled, weighed down by a smaller wholesale business and a tougher U.S. market. Kering’s market value has dropped about 70% from a high three years ago.
“De Meo has a titanic challenge ahead of him,” said Luca Solca, analyst at Bernstein. “Investors will need to hear what it is that de Meo plans to do and digest how soon his plans can be realized.”
Kering investors welcomed the news. Kering shares rose 12% in Paris on Monday, after reports of the likely appointment emerged, while Renault stock fell 8%.
Pinault, who met de Meo a few months ago, told analysts he had been laying the groundwork to split the roles of chairman and CEO for a number of years, a process that accelerated in recent months. He brought in two headhunters to help identify a successor.
In addition to retaining the chairman’s role, Pinault and his family hold a 42% shareholding and about 60% of the company’s voting rights. The holding accounts for the bulk of the family’s fortune, estimated at just under $20 billion.
