De Meo Effect Drives Kering Shares to Highest Level of 2025 Amid Turnaround Hopes

Shares in Kering, the luxury conglomerate that owns iconic brands such as Gucci, experienced a significant surge on Monday, reaching their highest level of 2025. This uplift in investor confidence is largely attributed to growing optimism surrounding the appointment of Luca de Meo as the new chief executive. De Meo, known for his track record in corporate turnarounds, is expected to revitalize the struggling fashion house and reverse years of underperformance that have plagued the group.

The company's stock climbed 3% to close at €283.25, surpassing its previous year-to-date high and marking its strongest trading level since August of last year. Despite this recent momentum, Kering's shares still remain more than 60% below their peak valuation in 2021, highlighting the scale of the challenge ahead. However, the luxury group has seen a remarkable recovery in the last three months, with its stock rising over 60% on the back of anticipations that de Meo, a recognized crisis specialist and former head of Renault, can successfully reignite lagging sales and implement significant cost-cutting measures.

The need for a strategic overhaul became starkly evident in Kering's second-quarter financial report, released in July, which revealed a substantial 15% decline in overall sales. Gucci, the group's flagship brand and a major revenue driver, accounting for approximately 45% of Kering's total income, was particularly hard hit, experiencing a pronounced 25% drop in sales. This performance underscored the urgent necessity for fresh leadership and a renewed strategic direction to restore the brand's luster and improve the group's financial health.

Luca de Meo officially commenced his role as CEO earlier this month, bringing with him a reputation for delivering results in challenging environments. His appointment has been met with considerable enthusiasm from the market, which is banking on his expertise to navigate the current headwinds facing the luxury sector and, specifically, Kering's portfolio of brands. The expectation is that his leadership will pave the way for a more stable and ultimately prosperous future for the group.

Industry analysts are closely monitoring these developments. UBS analyst Zuzanna Pusz noted in a recent brief that "Kering’s investment case continues to evolve amid ongoing management changes (new CEO joined recently), which brings a hope of a stabilisation for the group after multiple years of underperformance driven by Gucci." Pusz further expressed optimism regarding the upcoming financial disclosures, suggesting that "The upcoming results could show more signs of stabilisation with a sequentially narrowing sales decline, likely ahead of its peers."

All eyes are now on Kering's upcoming third-quarter sales report, which is scheduled for release on October 26. This report will provide the first concrete indicators of whether de Meo's arrival has begun to instill a sense of stability and whether the market's current optimism is warranted. Investors and analysts alike will be scrutinizing the figures for any signs of improvement, particularly in Gucci's performance, as the luxury giant embarks on a crucial chapter under its new leadership.