• by Sarah Mahoney  @mahoney_sarah, Yesterday

In a move that surprised the fashion world, Kering has tapped Luca de Meo as its new CEO, hoping that the auto veteran can steer names like Gucci and Saint Laurent out of their current sales ditch.

While many luxury companies face the same woes as Kering -- with even affluent shoppers reining in spending and the chaotic unfolding of tariffs clouding the outlook for global brands -- Kering has been much harder hit. In April, the company revealed first-quarter financial reports showing a 14% drop in revenue, which included a colossal 24% decline in sales at Gucci and a fall of 8% at Yves St. Laurent. And whileBottega Veneta gained 4%, Kering’s other fashion houses, which include Balenciaga, McQueen, Brioni and the group’s jewelry houses, posted a combined decrease of 11%.

De Meo’s resume includes 30 years running automotive brands, including Toyota Europe and Fiat Group. He has held high-level marketing roles at Volkswagen, including leading sales and marketing at Audi. He was named CEO of Renault in 2020 and is credited with a five-year turnaround that saw the company’s sales and market value surge. 

Subject to approvals, de Meo is expected to take the helm of the struggling fashion company in mid-September. Current CEO François-Henri Pinault, who will give up the role with the new appointment, said he has been hunting for Kering’s next CEO since 2023. 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 convinced me that he is the leader I was looking for to bring a new vision and steer this chapter in our Group's history,” he said in the announcement.

The news, first reported by French newspaper Le Figaro on Sunday and confirmed by Renault and Kering on Monday, sent Kering’s stock up as much as 12%.

“Brand management and marketing are his forte, which dovetails with what the luxury industry does — for which he seems passionate,” wrote Bernstein analyst Luca Solca in a note, quoted in Vogue Business, pointing out de Meo’s affinity for the luxury space and Swiss watches. “It is not hard to imagine how intriguing he found the Kering opportunity.”

While observers are applauding de Meo’s marketing savvy and turnaround track record, they also note that bringing back Gucci's brand heat is a very different challenge than selling cars. In a note cited by CNBC, Thomas Chauvet, senior equity analyst at Citi, wrote that de Meo will have his work cut out for him: "Execution of luxury brand turnarounds has become more complex, lengthy, costly, and far less public-market-friendly, reflecting consumer preference for top brands rather than those in transition and significant P&L disruption from greater investment commitment."