PARIS – Shares in Kering surged 7.2 percent early Monday on expectations that Renault chief executive officer Luca de Meo will soon take up the management helm of the troubled luxury group.

Equity analysts also gave a thumbs up to the prospect.

“Kering needs change, as performance has continued to deteriorate,” Bernstein’s Luca Solca said in a research note, highlighting that the company’s share price has fallen 28 percent in 2025 year-to-date and 78 percent from its peak in mid-2021, “largely driven by shrinking sales at its main brand, Gucci, which has been undergoing a multi-year metamorphosis.”

Citi’s Thomas Chauvet trumpeted de Meo’s credentials.

“De Meo is perceived to have largely contributed to Renault’s turnaround through product newness, technological innovation, (electric vehicle) transition shift, brand elevation, and a return to growth and profit,” Chauvet wrote, while cautioning that “execution of luxury brand turnarounds has become more complex, lengthy, costly and far less public-market-friendly in the past few years.”

He explained that this reflects “consumer preference for top brands rather than those in transition and significant P&L disruption from greater investment commitment and lower cost flexibility.”

“There is still a considerable amount of work ahead at Gucci and Saint Laurent (~80 percent of group EBIT combined, pre-central costs) to rejuvenate both brands and generate a steady stream of revenue and cash flow for the group,” wrote Chauvet.

Solca argued that brand management and marketing are de Meo’s forte, “which dovetails with what the luxury industry does – for which he seems passionate.”

“We were well aware of his affinity for the luxury space, in particular his passion for complicated Swiss watches that we discussed with him at the end of a Renault event in March 2022,” Solca noted. “It is not hard to imagine how intriguing he found the Kering opportunity.”

Kering has yet to comment on a report late Sunday in French daily Le Figaro that de Meo will succeed François-Henri Pinault, who has helmed the family-controlled group since 2005.

Renault Group had announced earlier Sunday that de Meo decided to “step down and pursue new challenges outside the automotive sector.” His departure will be effective July 15.

The Italian executive spent five years leading Renault and boasts 30 years in the industry at brands including Fiat, Alfa Romeo, Toyota, Volkswagen and Seat.

Kering has recruited industry outsiders in the past to run its fashion business. What was then Gucci Group famously recruited Robert Polet from Unilever’s ice cream and frozen foods division as its president and CEO from 2004 to 2011.

Pinault told shareholders at the company’s annual meeting last April that he was unhappy with Kering’s results and share price performance. “I am totally committed to making sure the stock price recovers by restoring financial performance, not in the very short term, but in a sustainable manner in order to generate a stock price that is less volatile and more solid in the months and years to come,” he said.

Kering is banking on its star Balenciaga designer Demna to speed the turnaround at Gucci, where he starts as creative director next month, with his first designs to be unveiled during Milan Fashion Week in September.