Kering Bets on New CEO De Meo for Speedy Luxury Turnaround

French luxury giant Kering is currently navigating a pivotal leadership transition, with investors eagerly awaiting the unveiling of its comprehensive turnaround strategy. While the full strategic roadmap from the new CEO, Luca de Meo, is not yet public, his recent appearance at the annual general meeting of the parent company of iconic brands like Gucci and Saint Laurent offered a clear, confident message designed to reassure stakeholders. De Meo, formerly at the helm of Renault, officially assumes his new responsibilities on Monday, marking a new chapter for the group.

During the significant event, François-Henri Pinault, who has dedicated two decades to leading the group founded by his father, François, reflected on Kering’s journey and its current performance. Visibly moved by this milestone, Pinault explained the strategic decision to separate the roles of chairman and CEO, a move that garnered strong approval from shareholders. He revealed that the succession planning began in 2023, culminating in the appointment of Mr. de Meo, drawing a parallel to the time his own father handed over the reins of the company.

Kering has contended with several challenges in recent years, most notably a significant level of debt. In response, the group has brought in an operational leader from outside the traditional luxury sector to orchestrate a revitalization. While de Meo judiciously refrained from disclosing specific major strategic details, despite persistent inquiries from shareholders, he carefully articulated his immediate priorities. He announced that a detailed strategic plan would be presented in early 2026, but assured that substantial measures would be implemented before the end of 2024. These immediate actions include a continued focus on debt reduction and cost optimization, with a clear statement that "if necessary, we will rationalize, reorganize and reposition some of our brands."

De Meo outlined his operational philosophy with conviction: "We will be fast, efficient and decisive." His objective is to fortify the company's foundations and cultivate an even more integrated and agile luxury group. He acknowledged that this transformation would likely require considerable effort from management, employees, and suppliers alike. Addressing the investor community directly, he added that the process would "also require a little confidence from you, the shareholders," concluding with a firm commitment: "We're going to bring the group back to where it should be."

François-Henri Pinault also offered a few updates on Kering’s real estate portfolio. He confirmed that previously announced transactions involving the group’s prime assets in Milan and New York were progressing, following a similar successful deal in Paris with Ardian. However, regarding de Meo's future strategy, Pinault remained tight-lipped, consistently advising patience: "Give Luca de Meo time to take up his post," he reiterated whenever questions about the future roadmap arose. He emphasized that de Meo, starting on Monday, possesses "all the latitude to make important decisions between now and the end of the year, to define the organization he considers best for the group and its key employees."

During the meeting, some shareholders voiced questions concerning de Meo's compensation package and expressed reservations about the increased age limits for both the chairman (now 80) and the CEO (now 70). Despite these points of contention, the overwhelming majority of shareholders ultimately approved all resolutions put forth, signaling their confidence in the board's direction.

As Luca de Meo officially commences his mission on September 15th, the luxury world will be closely watching his approach to steering Kering back to peak performance. The path forward for the venerable group will largely depend on how de Meo chooses to fine-tune its engine and implement his promised fast, efficient, and decisive strategy.