Gucci-owner’s shares Kering Pop 7% on Renault’s de Meo reports to be the next CEO

Shares of the French fashion house Dry 7% jumped on Monday that he had appointed the outsider of the industry, Luca de Meo as CEO of the group. It is offered as the owner of the dressed brands Gucci and Saint Laurent embarking on the lowest phase of her efforts.

The departure of the auto -veteran de Meo as Renault CEO was confirmed on Sunday, with the French car saying in a statement that he was withdrawing “to take on new challenges outside the automotive sector.”

The move of De Meo to Kerring was first announced by the French newspaper Le Figaro on Sunday. Kerring declined to comment on the reports when he contacted CNBC.

Kering’s shares were traded by 7.2% by 8:34 pm London time, while investors and analysts cheered the reports. Meanwhile, Renault’s shares threw 7%.

“The brand and marketing management is (De Meo’s) Forte, which is developing with what makes the luxury industry,” Bernstein’s analysts wrote on a note on Monday.

De meo is considered to have strong experience by working in the automotive sector for over 30 years, including in ToyotaFiat and VolkswagenS The Italian was largely credited with a reversal of Renault in his five years, with the shares over 90% for the period.

The challenges that the luxury sector faces, although large, like a kering among the largest lagging as buyers fell in love with their star Gucci. Kerring’s shares have downloaded over 60% in the last two years, caused by a series of profit warnings and design changes in Gucci.

Current CEO of Kering and Chairman Francois-Henry Pinot, a family member who controls the group, has been holding the best jobs for two decades, but has been actively working on its inheritance, According to For Reuters, quoting sources. It is reported that Pinault intends to divide the roles of the chairman and the Executive Director, according to sources. It was unclear if he would remain chairman.

Thomas Chauvet, a Senior Citi Share Analyst, praised Renault’s De Meo turn, including his embrace of technological innovation and the brand’s erection. However, he noted that the challenges of the future new role would be significant.

“The implementation of the brand’s luxury markings has become more complicated, long, expensive and far less convenient for the public market, reflecting consumers’ preferences for the best brands, not those in the transition and significant destruction of P&L than a larger investment commitment,” he wrote in a note.

“There is still a significant amount of work in Gucci and Saint Laurent … to rejuvenate both brands and generate a steady stream of revenue and cash flow for the group, which, if achieved, can lead to significant multiple ratings,” he added.