Short sellers are offloading their negative bets against Kering S.A., as the troubled luxury giant looks to mount a fightback under new CEO Luca de Meo following years of upheaval. Short sellers look to benefit from a company’s falling share price by borrowing its stock to sell on the open market, then later buying it back at a lower price. Shares of the Paris-headquartered multinational – which counts Gucci, Saint Laurent, Balenciaga, and Alexander McQueen among its key brands – rose 0.67% to the Thursday close after new CEO Luca de Meo, who took up his position on Sept. 15, appointed deputy group CEO Francesca Bellettini to reinvigorate Gucci. De Meo, who was hired from Renault, is tasked with shaking up the group, which has struggled with U.S. tariff pressures and falling demand for luxury goods in key markets such as China. Kering’s second-quarter earnings disappointed investors in July, with sales revenues tumbling 15% year-on-year, as the ailing Gucci brand and the group’s 9.5 billion euros ($11.17 billion) debt pile were flagged as key concerns. Separate from its financial troubles, Kering earlier this week revealed it suffered a data breach in April, with customer names, addresses and details of money spent in stores globally compromised. The company stressed that credit card and other financial information was unaffected by the hack. Kering’s woes have made it a perennial target among hedge fund short sellers, who have raked in gains from the company’s sliding value in recent years. But this week’s advance continues Kering’s recent positive momentum. The company’s stock has surged 27.4% in the past six months, according to FactSet data, putting it on course to reverse this year’s slide. Bearish investors now appear to be scaling back their negative wagers, with the percentage of Kering’s free float out on loan falling from over 10% earlier in the summer to 8% in September, according to reported estimates by short-selling data analytics firm Ortex, cited by Reuters. Kering was the most crowded short position among European large cap names last month, according to analysis by treasury and liquidity data provider Hazeltree, which monitors short positions in some 15,000 publicly-listed global equities, using a database of about 700 hedge funds. Regulatory filings with France’s Autorité des marchés financiers show Marshall Wace — one of the U.K.’s largest hedge funds— held a 0.67% net short position in Kering as of Sept. 16 — down from a reported 1.6% on July 16, according to ShortRegister data. A Marshall Wace spokesman declined to comment on the matter.
