Hedge funds have begun reducing bearish positions on French luxury group Kering after the appointment of a new CEO signalled a potential strategic shift at the company, according to a report by CNBC citing unnamed sources familiar with the matter.

Investors who had previously bet against the shares are reassessing their positions amid expectations that management changes could improve operational performance and investor sentiment.

CNBC's noted that the reduction in short positions reflects growing optimism that the firm may refocus its growth strategy or deliver stronger-than-expected results under new leadership.