Gucci-Owner Kering Pop shares are 10% in reporting that Renault’s De Meo will become the next CEO

French fashion house stocks Kering Industry outsider Luca de Meo won more than 10% on Monday in reports that he has been appointed group CEO. It brings the owners of the plagued brands Gucci and St. Laurent to the latest phase of their turnaround efforts.

De Meo, a car veteran as CEO of Renault, was confirmed on Sunday, with the French automaker resigning in a statement saying he would “take new challenges outside the automotive sector.” He will remain at the post office until July 15th.

De Meo’s move to Kering was first reported on Sunday by French newspaper Le Figaro. Kering declined to comment on the report when contacted by CNBC.

Kering’s shares had risen 10.3% by 9:45am in London as investors and analysts cheered on the report. Meanwhile, Renault’s stock will flow at 7%.

“Brand management and marketing is (De Meo’s) Forte, which is hindering what the luxury industry is doing,” a Bernstein analyst wrote in a memo on Monday.

De Meo is considered to have a strong track record and has worked in the automotive sector for over 30 years. Toyotaand Fiat Volkswagen. Italians have been praised primarily for Renault’s turnaround during their five-year helm, over 90% over that period.

Nevertheless, the challenges facing the luxury sector are looming heavily, with Kering taking the biggest lag as shoppers fall in love with Star Gucci labels. Kering’s shares have exceeded 60% in the last two years, sparked by a series of profit warnings at Gucci and designer changes.

According to Reuters, Kering’s current CEO and chairman François-Henri Pinault is a member of the group’s dominant family, who has been the top job for 20 years, but is actively working on his succession. Pinault reportedly intends to split the roles of the chairman and CEO, according to sources. It was unclear if he would remain in the chair.

City senior equity analyst Thomas Chowbett praised Demeo’s Renault’s shift, including embracing technological innovation and brand promotion. However, he pointed out that the challenges for new roles in the future are important.

“The execution of luxury brand turnarounds is more complicated, longer, more expensive, less public market friendly, not in the transition, reflects the preferences of top brands’ consumers, and reflects the significant P&L disruption from a larger commitment to investment,” he wrote in the memo.

“There is still a fair amount of work in Gucci and St. Laurent… rejuvenates both brands and creates a steady stream of revenue and cash flow for the group.

In April, Kering pointed to a macroeconomic headwind, falling 14% year-on-year, down 14%, compared to the previous year. Sales at Gucci have almost achieved group revenues, led losses, down 25% on a comparable basis.