Shares of Gucci-owner Kering pop 10% on reports Renault’s de Meo to be next CEO

Shares of the French fashion house Dry Made more than 10% on Monday on information that she appointed the industrial origin Luca de Meo as a group CEO. He came as the owner of the besieged brands Gucci and Saint Laurent embarked on the last phase of his recovery effort.

The departure of the Meo car veteran as CEO of Renault was confirmed on Sunday, the French car manufacturer saying in a press release which he resigns “to meet new challenges outside the automotive sector”. He will stay in post until July 15.

On Sunday, the move from Meo to Kering was reported by the French newspaper Le Figaro. Kering refused to comment on the reports when contacted by CNBC.

Kering’s shares were exchanging 10.3% by 9:45 a.m. in London, investors and analysts applauded reports. Renault shares, on the other hand, lost 7%.

“Brand management and marketing are [de Meo’s] Strong, which is accompanied by what the luxury industry does, “wrote Bernstein analysts in a note on Monday.

De Meo is considered to have solid history, having worked in the automotive sector for over 30 years, especially in ToyotaFiat and Volkswagen. The Italian is widely credited with Renault’s recovery during its five years at the helm, with actions of more than 90% during the period.

The challenges faced by the luxury sector, but which is looming, with Kering among the largest Laggards, because buyers fell in love with its star Gucci label. Kering’s actions have lost more than 60% in the past two years, triggered by a series of warning warnings and changes in designers in Gucci.

The CEO and president of Kering, François-Henri Pinault, member of the family who controls the group, occupies the best jobs for two decades but actively works on his succession, according to in Reuters, citing sources. Pinault would intend to divide the roles of the chair and the CEO, according to sources. It was not clear if it will remain president.

Thomas Chauvet, main analyst in actions at Citi, congratulated the rectification of Renault de De Meo, including his embrace of technological innovation and the elevation of the brand. However, he noted that the challenges of the new potential role would be important.

“The execution of luxury brands reversals has become more complex, long, expensive and much less public adapted to public contracts, reflecting the preference of consumers for the best brands rather than those of transition and significant disruption of the P&L of a greater investment commitment,” he wrote in a note.

“There is still a considerable quantity of work in advance in Gucci and Saint Laurent … to rejuvenate the two brands and generate a constant flow of income and cash flow for the group, which, if made, could lead to a significant multiple reduction,” he added.

In April, dry poster A decrease of 14% of 14% in annual shift in sales in the first quarter and highlighted the macroeconomic opposite winds to come. Gucci sales, which almost represent group income, losses have led, a decrease of 25% on a comparable basis.