Luca de Meo, the current chief executive officer of Renault, is set to become the new CEO of Kering, the luxury goods conglomerate, effective July 15. This announcement has sent shockwaves through both the automotive and luxury sectors, leading to a nearly 12% surge in Kering’s stock price while Renault's shares fell by 9%.

The board of directors at Renault stated that a process for appointing a successor has already commenced, following a succession plan established previously.

De Meo has led Renault for five years and is well-regarded for his operational expertise.

His upcoming role at Kering is seen as a strategic move to revitalize the luxury brand, which has faced significant challenges in recent years.

Kering, the owner of renowned brands such as Gucci and Yves Saint Laurent, has experienced a decline in its stock value of approximately 60% over the past three years.

The flagship brand, Gucci, reported a 25% drop in sales during the first quarter, following a 21% decrease the previous year.

The transition to a leader from outside the traditional luxury sector is viewed as a bold step by François-Henri Pinault, Kering's current CEO and president, who will retain his role as board chairman.

Reports have suggested that Pinault was contemplating a separation of the CEO and chairman roles due to the mounting pressures faced by the business.

The appointment of De Meo is intended to send a clear signal to investors as Kering’s stock was recently removed from the EuroStoxx 50 index.

This move marks a significant shift within the luxury market, where established conventions are increasingly being challenged as companies adapt to shifting consumer preferences and market dynamics.