Gucci-On-Sale News

Monday 11 January, 2010

Gucci New management

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In 1989, Maurizio managed to persuade Dawn Mello, whose revival of New York's Bergdorf Goodman in the 1970s made her a star in the retail business, to join the newly formed Group as Executive Vice President and Creative Director Worldwide. At the helm of Gucci America was Domenico De Sole, a former lawyer who helped oversee Maurizio's takeover of ten 1987 and 1989. The last addition to the creative team, which already included designers from Geoffrey Beene and Calvin Klein, was a young designer named Tom Ford. Raised in Texas and New Mexico, he had been interested in fashion since his early teens but only decided to pursue a career as a designer after dropping out of Parsons School of Design in 1986 as an architecture major. Dawn Mello hired Ford in 1990 at the urging of his partner, writer and editor Richard Buckley. In the early 1990s, underwent what is now recognized as the poorest time in the company's history. Maurizio riled distributors, Investcorp shareholders, and executives at Gucci America by drastically reining in on the sales of the Accessories Collection, which in the United States alone generated $110 million in revenue every year. The company's new accessories failed to pick up the slack, and for the next three years the company experienced heavy losses and teetered on the edge of bankruptcy. Maurizio was a charming man who passionately loved his family's business, but after four years most of the company's senior managers agreed that he was incapable of running the company. His management had had an adverse effect on the desirability of the brand, product quality, and distribution control. He was forced to sell his shares in the company to Investcorp in August 1993. Dawn Mello returned to her job at Bergdorf Goodman less than a year after Maurizio's departure, and the position of creative director went to Tom Ford, then just 32 years old. Ford had worked for years under the uninspiring direction of Maurizio and Mello and wanted to take the company's image in a new direction. De Sole, who had been elevated to President and Chief Executive Officer of Group NV, realized that if Gucci was to become a profitable company, it would require a new image, and so he agreed to pursue Ford's vision. Domenico De Sole was incensed by the news and declined Arnault's request for a spot on the board of directors, where he would have access to Gucci's confidential earnings reports, strategy meetings, and design concepts. De Sole reacted by issuing new shares of stock in an effort to dilute the value of Arnault's holdings. He also approached French holding company Pinault-Printemps-Redoute (PPR) about the possibility of forming a strategic alliance. Francois Pinault, the company's founder, agreed to the idea and purchased 37 million shares in the company, or a 40% stake. Arnault's share was diluted to a paltry 20%, and a legal battle ensued to challenge the legitimacy of the new Gucci-PPR partnership, with the law firm of Skadden, Arps, Slate, Meagher & Flom representing. Courts in the Netherlands ultimately upheld the PPR deal, as it did not violate that country's business laws. The second largest shareholder is Crédit Lyonnais with 11%. As of September 2001 a settlement agreement was put into place between Gucci Group, LVMH, and PPR. Following Ford's departure, Group retained three designers to continue the success of the company's flagship label: John Ray, Alessandra Facchinetti and Frida Giannini,[5] all of whom had worked under Ford's creative direction. Facchinetti was elevated to Creative Director of Womenswear in 2004 and designed for two seasons before leaving the company. Ray served as Creative Director of Menswear for three years. 32-year-old Giannini, who had been responsible for designing men's and women's accessories, currently serves as Creative Director for the entire brand.

News for Sunday 10 January, 2010