Gucci -Kering Pop 9 % on the reports of Renault’s de Meo to be the next CEO

French fashion house shares dry More than 9 % emerged on Monday on reports that it was appointed externally in the industry, Luka de Miu as the group’s executive. This comes as a owner of the Gucci and Saint Laurent brands in the last stage of its effort.

The departure of the veteran in cars was confirmed as the CEO of Renault on Sunday, as the French car maker said in a statement that he is stepped “to face new challenges outside the automotive sector.”

De Meo was transferred to KERING for the first time by the French newspaper Le Figaro on Sunday. KERING refused to comment on reports when calling it by CNBC.

KERING shares were traded by 9.4 % by 9.23 am London time, where investors and analysts chanted reports. Renault shares, at the same time, watered 7 %.

“The brand management and marketing is (De Meo’s) Forte, which corresponds to what the luxury industry is doing.”

De Meo is seen as a busy record, where he worked in the auto sector for more than 30 years, including in ToyotaFiat and Volkswagen. Thanks to the Italian is largely due to the transformation of Renault during the five years on his head, as the shares rose more than 90 % during this period.

However, the challenges facing the luxury sector looming on the horizon, with the presence of KERING among the largest arrears as shoppers fell from the love of his star Gucci. KERING shares have decreased more than 60 % in the past two years, ignited a series of profit warnings and the change of designer in Gucci.

The current CEO of KERING Chairman and Chairman of the Board Francois Henry Pinol, a family member who controls the group, has occupied the first jobs in two decades, but he actively works in contradiction, According to For Reuters column, citing sources. According to what Penol, Pinol, intends to divide the roles of the president and the CEO, according to the sources. It was not clear if he would remain a chair.

Thomas Chauvet, chief arrow analyst in Citi, praised the transformation of De Meo in Renault, including his embrace of technological innovation and brand height. However, he pointed out that the challenges of the potential new role will be great.

“The implementation of the transformation of luxury brands has become more complicated, taller, expensive and less suitable for the public market, which reflects the preference of consumers to the highest brands instead of those going through a transitional stage and a great disorder of P&L of the commitment of the greatest investment,” he wrote in a note.

He added: “There is still a great deal of work in the introduction in Gucci and Saint Laurent … to renew the youth of brands and generate a continuous flow of revenues and cash flow to the group, which, if achieved, can lead to a large multiple recovery.”

In April, dry to publish A 14 % worse decrease in annual basis in sales of the first quarter and pointed to the opposite winds of the macroeconomic economy. Sales in Gucci, which constitute nearly the group revenue, led the losses, decreased by 25 % on a similar basis.