French business looks up from ‘Transfer of the Year’: unexpected departure of successful Renault CEO to Gucci Concern

The economic transfer of the year, an earthquake, a thunderbolt. The French press lacks superlatives when describing the departure of Renault CEO Luca de Meo (58), that the French car manufacturer is Sunday evening announcement. The Italian exchanges the car manufacturer according to Le Figaro In mid -July for Kering, the luxury goods conglomerate that includes brands such as Gucci, Saint Laurent and Balenciaga. At Kering, space is released because CEO François-Henri Pinault (63), the man who has made the group big in the last two decades, takes a step back.

The switch from the Meo is a surprise. The French-speaking Italian has worked all his career in the car industry: He started ever At Renault in Italy and later worked at Fiat and Seat, among others. There were stories that if he left Renault, he would go to competitor Stellantis. And he only worked at Renault for five years. The MEO devised Renaulutiona somewhat unfortunate combination of the brand name and the always appealing in France Révolutionhas only just been completed.

Partnerships and redundancies

After the Meo took office as chairman of the board in 2020, he had to guide the company through all kinds of crises. From the Coronapandemie, which meant a loss of 8 billion euros and the dismissal of 15,000 people, until leaving the Russian market after Russia invaded Ukraine in 2022 (2.3 billion euros loss). Renault (which is 15 percent in the hands of the French state) was large in Russia, as the owner of Lada.

But later the contours of his ‘revolution’ began to sign up. Among other things, he brought the branch of Renault that makes fuel engines in a collaboration with Chinese Geely. In this way the car brand could fully focus on developing electric power lines. Unlike competitors such as Volkswagen, Renault did not invest in the making of batteries, but entered into partnerships with battery producers such as the French Verkor. In the meantime, new models from Renault were appreciated by consumers.

The reform is bearing fruit: after a few difficult years before the MEOs coming, the brand is now one of the few European car manufacturers who are really good. Sales grew by 7.4 percent last year to 56.2 billion euros and within the European Union, Renault started selling more than 7 percent more in the first five months of this year compared to last year.

Not everything succeeded De Meo: the restructuring of the collaboration with the Japanese Nissan in 2023 and investments in the Alpine brand, which makes cars for Formula 1, have not yet delivered the desired results. And sales on the French market are decreasing (-2.1 percent in the first five months of this year). The question is also how well Renault is equipped for the challenges that all European car builders now have to deal with: the demand for electric vehicles does not rise as hoped and competitors from mainly China panting in the neck.

Nevertheless, the MEOs counted as a success at the top for five years. “Who had thought that?” De Meo said in February. “A company that balanced on the edge of the abyss less than four years ago is now catapulted to the stage of European producers, while those who seemed to be unsinkable yesterday, ignoring the emergency signals.” The stock market also shows that the MEO is considered a skilled top man: after the announcement of his departure at Renault, his stock market price fell by 7 percent, while that of Kering shot up by more than 9 percent.

Nose for marketing and watches

At Kering they will be happy with the MEOs coming. The shareholders had been letting a divorce of the duties of President of the Supervisory Board and chairman of the Board of Directors for some time. They are currently both covered by François-Henri Pinault, the son of the founder who led the family business for twenty years.

Pinault resistant according to Le Monde For a long time against this plan. But through a series of crises and after a meeting with the Meo he would have tacked. Pinault is said to be charmed by the Italian, his nose for marketing and his preference for expensive watches. Pinault remains as chairman of the board of directors.

The Meo will also have to work with Kering, because this company is not in good shape either. Luxury brands are having a hard time worldwide, but there are additional problems with barrier. With Gucci, which in 2023 still provided half of the sales figures of Kering, things are going very bad since artistic director Alessandro Michele left in 2022. Saint Laurent is also struggling with financial problems, and the share price of the multinational fell by more than 60 percent in two years. Will the Italian CEO here one Cherry Want to achieve?

With the cooperation of Milo van Bokkum.

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