Why Kering founder Pinault chose Luca de Meo as CEO

French luxury group Kering appointed Luca de Meo as its new chief executive officer. François-Henri Pinault stepped down after more than 20 years. Why did the Kering founder consider the Renault boss the best candidate to lead the company into a new phase of growth after the disappointing business performance of recent quarters?

Long process

"The group’s performance over the past two years has not met our expectations, nor the immense potential of our houses," Pinault admitted during a conference call with analysts on Tuesday, April 10, 2024. The appointment of a group CEO marked the conclusion of a long process that began in early 2023. After 2022 – according to the founder, the best year in Kering’s history – it became clear to him that the company had reached a phase that required a new organisational structure.

Therefore, in 2023, Pinault appointed Francesca Bellettini and Jean-Marc Duplaix as deputy CEOs to make "significant changes" to the group. Duplaix assumed the new role in addition to his existing management of operations and finance. Bellettini was previously head of fashion house Yves Saint Laurent.

Since then, there have been hectic times at the top of the fashion houses belonging to Kering. At Gucci, former Balenciaga creative director Demna Gvasalia followed Sabato de Sarno. Pierpaolo Piccioli took over the creative direction at Balenciaga. The top positions at the maisons were not spared either; at Gucci, Stefano Cantino was recently appointed CEO, and at Saint Laurent, former Balenciaga boss Cédric Charbit holds the top job. These are just a few of the recent management changes.

Pinault considered these personnel changes and organisational measures already underway to be the absolutely necessary foundations that had to be laid before de Meo took office. De Meo would now have to deal with the measures already initiated on cost structure and refinancing in the short term in his new position. More importantly, however, de Meo needed to look to the future and think about the long-term perspective. What might Kering’s profile look like in the next 10 to 15 years?

This is a question Pinault hoped his new CEO would answer. De Meo was therefore expected to present a strategy for the group after taking office.

Why an industry outsider?

But why was this task given to a manager who could look back on a more than 30-year career in the automotive industry but had no experience in fashion?

Initially, the candidate profile Pinault was looking for was not surprising in many respects. It was to be an experienced manager with in-depth knowledge of brand management and international experience; managing a global listed company was an additional criterion. Given the significant changes in the fashion industry, the candidate should have already demonstrated agility and the ability to deal with change.

Most importantly, however, Pinault wants the future CEO to bring a fresh perspective to the luxury market: "The ability to bring a new vision to the sector and to our group was a key requirement." It was precisely the structural changes that went beyond the previous cyclical developments in the luxury industry that required a new way of looking at things, Pinault said.

The former head of Kering seemed to be hoping for similar success from de Meo’s appointment to the one he had with the group’s transformation from 2010 and the repositioning of Gucci. As a newcomer to the fashion industry, he had been in a "strong position" to navigate phases of new structural change in the industry.

Can Pinault let go?

Pinault was also keen to stress that he was not hiring a "fireman" but someone to lead the group’s "next chapter of growth". "He will have all the power and authority I had as CEO when I ran the group. So he will set his own priorities, keeping in mind the organisation of the group and the key position of the group," the Kering founder said.

With de Meo taking office on September 15, the roles of chairman of the supervisory board and CEO would be separated. Both roles had previously been held by Pinault. He now wants to be "fully involved in the strategic direction of the group" as chairman of the supervisory board. Nevertheless, he vowed not to interfere in the new CEO’s decisions on the business model and key personnel.

However, it appears that the previous co-CEOs, Duplaix and Bellettini, could remain in their positions for the time being to help the CEO, who is new to the industry. When asked by an analyst whether the previous structure with the two could be maintained, Pinault replied: "He doesn’t know the luxury industry, so we need strong support and a lot of expertise around him. And we have that within the group, starting with Jean-Marc and Francesca."

Open points

De Meo’s salary is not yet known but will be discussed at a supervisory board meeting on July 29 before the annual general meeting voted on it on September 9.

It will also be interesting to see what long-term vision de Meo will present after Pinault had already initiated many changes in the past two years – starting with the key positions at many fashion houses, such as those of former flagship Gucci. "Having the right people in the right place in the group so that when a new CEO comes in, everything works and runs," Pinault explained his approach. Until de Meo took office, there would be no slowdown in the action plans already initiated at the brands.

Was still-Kering-boss Pinault really concerned with putting everything in order in the group before his successor arrived, or was it an attempt to quickly get involved himself? Given this already laid foundation, the question also remains as to what extent the new group CEO, de Meo, could still get involved.