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By Tassilo Hummel
PARIS (Reuters) -Renault CEO Luca de Meo is leaving the French carmaker to pursue a role outside the auto industry, the company said on Sunday, and newspaper Le Figaro reported he would become the new chief executive of Gucci-owner Kering (EPA:PRTP).
De Meo turned around the troubled French automaker in his five years at the helm, overhauling its two-decade-long strategic alliance with Nissan (OTC:NSANY) and doubling down on hybrid motors while shifting towards electric vehicles.
The Italian will replace Kering CEO Francois-Henri Pinault, whose family controls the heavily indebted luxury conglomerate and who has been leading it for 20 years, Le Figaro reported.
Kering declined to comment on Le Figaro’s report.
"Luca de Meo has expressed his decision to step down in order to take on new challenges outside the automotive sector," Renault (EPA:RENA) said in a statement.
De Meo will leave Renault in mid-July, Renault added. The French state holds a 15% stake in the company.
If confirmed, de Meo’s move to Kering, which has lately failed to convince stock market investors of its plans to turn around its Gucci label, would mark a dramatic change at the group. Pinault would remain Kering’s chairman.
Speculation about the leadership of the group, which also owns the Yves Saint Laurent and Balenciaga labels, accelerated last week after French media reported Pinault was poised to give up the CEO role.
A person familiar with the thinking of Pinault told Reuters on Friday he was actively working on his succession, which includes splitting up the two roles to hire a new CEO.
Kering shares have lost more than 60% of their value in the last two years, marked by a string of profit warnings and designer changes at Gucci, a former cash cow for the company and still its most important brand by sales and profits.
TURNAROUND ARCHITECT
De Meo’s unexpected departure marks the second top-level exit from a European carmaker in six months, after Carlos Tavares resigned from Stellantis (NYSE:STLA), at a time the sector in Europe is reeling from U.S. President Donald Trump’s trade tariffs and fierce competition from Chinese rivals.
De Meo joined Renault from Volkswagen (ETR:VOWG_p) in 2020, a year when the French carmaker reported record losses after a pandemic-induced hit to sales.
In the years since, De Meo launched wide-ranging cost cuts that sharply reduced headcount and production capacity worldwide and turned the firm into a smaller but nimbler company. He also oversaw a vast reshaping of Renault’s decades-old, but often difficult, relationship with Japan’s Nissan.
Separately the Nikkei newspaper cited Nissan boss Ivan Espinosa as saying it was considering selling some of its Renault stake.
"There has been no change in the longstanding cooperative relationship between Nissan and Renault," Nissan said in a statement, adding no "definitive decisions" had been made on a share sale.
Renault’s focus on European markets has largely shielded it from the upheaval tied to U.S. trade policies that German carmakers like BMW (ETR:BMWG) and Mercedes-Benz (OTC:MBGAF) are facing.
Renault was one of only a few automakers not to issue a profit warning last fall. Its shares are up about 90% over the past five years, the best performing carmaker in Europe. Rival Stellantis is up 15% and VW is down 38%.
Kering faces its own turnaround needs.
Under Pinault’s leadership, the group became a pure luxury player and enjoyed years of spectacular growth, largely thanks to Gucci. But since the COVID-19 pandemic, Kering has struggled to reinvigorate the brand and also took on more than 10 billion euros in debt which now exposes it to the risk of another credit downgrade, Reuters reported last month.
Kering unexpectedly cancelled an event with analysts planned for Monday, without saying why, a person familiar with the matter said.