Henri Pinault's decision to hire Renault boss Luca de Meo is an audacious but necessary move to address the twin challenge of sagging sales and mounting debt at luxury group Kering, investors and industry players say.

The luxury group confirmed speculations reported by a number of media outlets this weekend. Pinault will retain his role as Kering chair.

The appointment of de Meo, 58, marks a big change at Kering, owner of the Gucci and Saint Laurent brands, where François-Henri Pinault, a member of the family that controls the group, has been chair and chief executive for 20 years.

WHO IS HE? De Meo, 58, is from Milan, Italy, and has more than 30 years' experience working in the automotive sector. He graduated from the Luigi Bocconi Commercial University wit

A series of delicate issues awaits the Italian executive, who comes from Renault: an unfavorable economic climate, significant group debt and the collapse of sales at flagship brand Gucci. Financial markets have responded positively to the announcement of his appointment.

The former chief executive of the carmaker Renault will replace Francois-Henri Pinault as the struggling company seeks a turnaround.

Gucci owner Kering said it was hiring Renault boss Luca de Meo as its new CEO to help revive the debt-laden luxury conglomerate, confirming reports that sent its shares soaring and those of Renault tumbling earlier on Monday.

Luca de Meo, Renault’s CEO, is the powerhouse of the European car industry. Five years ago – in the summer of Covid-19 – he was appointed to salvage the French car maker, which had just posted a 7.3-billion Euro loss (more than £6 billion).