Gucci's Parent Company Announces a New CEO
Luca de Meo has landed the top spot at Kering.
Last weekend there were some rumblings that Kering (the parent company of brands like Gucci, Alexander McQueen, YSL, etc) would name a new CEO, but they officially confirmed it on Monday. Luca de Meo will lead the company effective September 15th. Unlike how the market responded to the news of Demna as Gucci’s new creative director months ago, Kering saw its stock rise nearly 12% after the announcement (though some of that increase has eroded in the last few days.) In a time of shakeups across the luxury market, this is one of the most interesting we’ve seen. Luca is a turnaround expert, and even though he’s coming from the automotive industry, a different perspective might be exactly what they need.
Luca’s entire resume is impressive but his most relevant experience to his upcoming role is the job he’s leaving. When he first joined Renault as CEO in 2020, the company wasn’t doing well at all. He and his executive team quickly put together and announced the “Renaulution” strategic plan. They planned on restoring the company’s ability to compete by:
taking the 2o22 plan one step further, driving efficiency through engineering and manufacturing, to reduce fixed costs and to improve variable costs worldwide,
leveraging on current Group Renault’s industrial assets and electric leadership in Europe,
building on the Alliance to boost our reach in products, business and technology coverage,
accelerating on mobility, energy-dedicated and data-related services,
driving profitability through 4 differentiated business units based on empowered brands, customers and markets oriented.1
There was plenty of detail on how they would achieve this and more from a tactical perspective on their website. This crystal clear strategy and setting of a new north star served them well. At Luca’s departure Renault could boast some impressive metrics, including going from a €7.3 billion loss in 2020 into an operating profit of €4.3 billion in 2024, improved variable costs that contributing to higher per-vehicle profitability, and the successful launch and repositioning of a number of vehicles in their portfolio. This is more than enough proof that he’s great at identifying what needs to be done to improve a company’s financial and operational health, and is comfortable making hard decisions like headcount reduction.
Publicly the former Kering CEO Francois-Henri Pinault supports this move. While his tenure had more than enough wins, some of it is being overshadowed by the company’s current state of affairs. Kering has been in somewhat of a downward spiral as Gucci’s sales and prestige have been trending downward. The brand’s poor performance is even more significant when you realize that last year, Gucci accounted for 44% of Kering’s overall revenue. Pinault was never able to course correct.
He had an impressive 20 year run but tenures of C-Suite executives have become shorter and shorter over the last several years. With the current state of the global economy there’s very little wiggle room for keeping a company stagnant, much less consecutive quarters of negative sales growth. Pinault will still keep his seat as Chairman of the Board of Directors.
Renault Group’s Media Website; Groupe Renault “Renaulution” strategic plan