Henri Pinault's reported 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.

Kering SA named Luca de Meo as its next chief executive officer, looking to the architect of carmaker Renault SA’s turnaround to perform the same feat at the owner of the struggling fashion label Gucci.

Kering shares soared in early trade as investors and analysts cheered reports that industry outsider Luca de Meo was set to become group CEO.