Bravo To Check Burberry For Gucci?
Rose Marie Bravo has apparently been offered the financial helm of Gucci for an undisclosed sum. A Burberry source stated she told the Florentine Fashion House she needs a week to think through the offer.
www.gucci.com
24 November 2003
Could Bravo Be Swayed By Gucci?
In an audacious bid by Francois Pinault, the French billionaire whose company, Pinault-Printemps-Redoute, controls the Italian fashion house Gucci, Burberry boss Rose Marie Bravo is to be considered to be wood over to Gucci.
Ms Bravo, whose £10m pay deal makes her one of the best-paid people in British business, would fill the vacancy created by the resignation of Domenico De Sole, the chief executive who revitalised Gucci.
Industry sources have said M. Pinault planned to tempt Ms Bravo to take the reins at Gucci. "Her reputation at Burberry should be enough to soothe investors' doubts about Gucci for a while," said one senior figure.
Ms Bravo came to Burberry from Saks Fifth Avenue, the US department store group, which has struggled since her departure.
Alexander McQueen, the British designer, was said to have been offered the post of chief designer at Gucci, replacing Mr Ford, but to have turned it down.
Serge Weinberg, chief executive of PPR, has said Mr Ford's role as chief designer of both Gucci's main labels, Gucci and Yves St Laurent, will be split. It is believed PPR's wish to appoint a new designer at YSL was one of the reasons for Mr Ford and Mr De Sole's decision to leave.
10 November 2003
www.gucci.com
Gucci Rumours Continue
First there was the rumour that Alexander McQueen was take over the helm of designing at Gucci. Now there is speculation that Tom Ford and Domenico de Sole may move to Versace, when they are due to leave the Florentine fashion house next April.
Versace has famously recorded a series of losses over the past two years. However, it remains family owned and there is doubt over whether majority shareholder and chief designer Donatella Versace would cede control.
10 November 2003
www.gucci.com
Will Gucci's Shakeup Affect Other Fashion Houses?
It has been published widely that the big multibrand conglomerates are all facing similar problems as each relies largely on a single brand: LVMH on Louis Vuitton, Gucci on Gucci, and Richemont of Switzerland on the jeweler Cartier.
While Vuitton and Gucci have been the powerhouses of their respective parents, much of the cash they generate is burned up by less successful labels, like LVMH's Fendi and Yves Saint Laurent at Gucci. With Cartier ailing, growth at Richemont virtually collapsed this year.
The announcement that Tom Ford and Domenico De Sole will be leaving Gucci at the end of April seems like nothing but good news for Bernard Arnault, the chairman of LVMH Moët Hennessy Louis Vuitton, Gucci's archrival in the luxury goods market. But some people in the fashion business say that Mr. Arnault and LVMH should enjoy the good news while it lasts. The entire luxury goods sector and not just Gucci, they argue, is facing profound changes that could change the way the industry does business.
You would think, too, that fashion houses like Gucci live in part from intangibles, like the creative flair of the designers who drive them. People like to see a face with the brand: Marc Jacobs at Louis Vuitton, for example, or Miuccia Prada at Prada. Rarely was the front of house role fulfilled as successfully at a design house, as that of Mr. Ford, who took over Gucci with Mr. De Sole in the 1990's when the fabled Florentine fashion house was on the ropes.
With Mr. Ford reviving Gucci's flair, and Mr. De Sole its marketing machinery, the two transformed Gucci from a luxury goods has-been to the hot item of the late 1990's. Now the questions remains, is the brand strong enough to survive on its own? With economies recovering and tourism becoming popular again, the bleak future we saw a few years ago no longer holds true. For some fashion houses, however, recovery will trickier than others. Especially when their signature gets blurred.
6 November 2003
www.gucci.com
Gucci Duo To Quit Next Year
The
masterminds behind Gucci left the Italian fashion house in turmoil last night,
after the two men who single-handedly changed the company from an almost bankrupt
family firm to a luxury empire, said they will quit when their contracts expire
next year.
Domenico de Sole, the chief executive, and Tom Ford, the designer, announced their decision after failing to agree new contracts with Gucci's French majority shareholder, Pinault Printemps Redoute (PPR).
A Gucci spokesman said that Mr Ford, 42, and Mr De Sole, 59, who transformed the moribund label with annual sales of £120 million into a £1.8 billion luxury conglomerate, will leave on 30 April.
The decision by the pair, dubbed the most powerful duo in fashion, ends months of speculation that has focused the attention of followers, from buyers to the trading desks of New York and London, over who should control the company. PPR, which owns 68 per cent of Gucci and has pledged to buy the rest by next spring, insists on exerting management control.
But Mr De Sole and Mr Ford argue that after all they have done for the fashion house, they should retain managerial independence from PPR, which is based in Paris and controlled by the French tycoon François Pinault. According to sources, compensation requirements were the last sticking points in the negotiations. Mr De Sole was paid £1.8 million in Gucci's last financial year, while Mr Ford was paid about £4 million.
The departure leaves the fashion house rudderless at a time when the fashion sector is picking up. Claire Kent, a luxury goods analyst at Morgan Stanley, in London, said: "We think the likelihood of PPR easily finding a designer who can interpret the sensibility of the Gucci and YSL brands in the way consumers appreciate is low." The drama at Gucci highlights a serious shortcoming in the fashion world: a dearth of creative talent that can excite consumers.
5 November 2003
www.gucci.com
Gucci Contracts Remain Unsolved
Contract negotiations between Gucci's star management team and owner Pinault-Printemps-Redoute (PPR) dragged on yesterday, dashing expectations of an imminent settlement.
Gucci Chief Executive Domenico De Sole said recently that he and designer Tom Ford hoped to resolve the dispute, which centers on creative control, money and a variety of other issues, by the end of October.
But last week came and went with no announcement from either side. The setback suggests that the discussions have not gone as smoothly has had been expected, though a resolution is still a possibility, people familiar with the situation said.
The contract talks have dragged on for months, complicated by a downturn in luxury goods that hit the Gucci brand particularly hard. More recently, Gucci Group said its business was experiencing a rebound - news that would seem to strengthen De Sole and Ford's bargaining position.
De Sole's contract expires in March, the same month PPR has agreed to buy the remaining 32.4 percent of Gucci it does not already own. Ford's contract expires in July.
4 November 2003
www.gucci.com
Gucci Sees Profit Rise in Second Quarter
Luxury group Gucci expects a "huge improvement" in profitability in the second half of its financial year compared to a year ago, Chief Executive Domenico De Sole told Reuters on Wednesday.
But he added it was too early to say whether the full-year profit would beat last year's because much depended on the important Christmas gift-giving period.
The expected profit rise is due to high margins at the main Gucci brand where sales have picked up strongly recently.
Gucci revealed earlier on Wednesday that its second quarter net profit almost halved to 22.7 million euros ($26.43 million) from 42.8 million a year ago, But the figure was way above the first quarter's 1.2 million.
17 October 2003
www.gucci.com
Gucci is confident, although Q2 profit drops
Gucci posted a big drop in second-quarter and first-half earnings. Second-quarter net profit dropped to 22.7 million euros ($26.43 million) from 42.8 million a year ago, and even that figure was shored up by a timely tax credit of 23.5 million euros as well as financial and other income.
Group sales for the three months to end-July were only marginally higher at
583.7 million euros, while sales at the Gucci division actually fell slightly.
Gucci has suffered like its peers from a decline in luxury goods spending due
to a global economic downturn, the SARS epidemic and the war in Iraq. The industry
is heavily dependent on tourism -- especially from the Japanese and Americans
-- since tourists account for the majority of spending at flagship outlets.
The Gucci group brands include Yves Saint Laurent, Stella McCartney and Alexander
McQueen. The Amsterdam-listed firm is majority-owned by French department store
operator Pinault-Printemps-Redoute. This company plans to increase its stake
in Gucci to 70 percent by the end of this year and to buy out minority shareholders
next year.
October 10, 2003
www.gucci.com
Insurance Scam Will Cost Gucci Baron
Francois Pinault, the luxury goods baron whose empire controls Gucci, is in major discussions to reach an out-of-court settlement to the long-running Executive Life insurance scandal that could cost him hundreds of millions of dollars.
Pinault, France's third-richest man with a family fortune estimated in July at GBP3.14bn, has been left isolated after the French government and former state bank Credit Lyonnais, also threatened with charges, agreed to pay GBP346m in fines and potential damages last week.
Lawyers for Pinault's family holding company Artemis are in talks with attorneys about a parallel settlement.
The case arises from the purchase by Credit Lyonnais in 1991 of collapsed Californian insurer Executive Life, and the related purchase by Artemis of a portfolio of junk bonds* from Executive Life which Artemis then sold on turning a profit of $2bn. Both Lyonnais and Artemis are alleged to have concealed details of the transactions from US supervisory authorities.
11 September 2003
www.gucci.com
Gucci Group Report Growth in Sales
Gucci Group announced on Tuesday it enjoyed a double-digit growth in retail sales in Japan, the United States and Europe in August and reiterated it expected a strong Autumn season. Confirming a report in French daily Les Echos, Gucci also said sales in Asia, excluding Japan, grew last month but not at a double-digit rate.
"We had difficult trading during the Iraq war and because of SARS, but an improvement started in May and June. The trend is for strong development," said a spokesman for Gucci, the third biggest luxury goods group after number one France's LVMH and Swiss Richemont. Gucci shares gained on the news and by 1119 GMT were 1.11 percent stronger at 91.45 euros after earlier touching an intraday high of 91.60 euros. Its shares are listed on the Amsterdam and New York GUC.N stock exchanges.
French retailer Pinault Printemps Redoute owns a majority stake in Gucci. Shares in PPR, which will report first-half results on Thursday, were up 3.4 percent at 82.10 euros. "It is the statements by (Gucci CEO) de Sole, the rise of the dollar and the improvement in the environment for the luxury industry that is boosting PPR," said one Paris-based trader.
PPR has the right to increase its stake in Gucci to 70 percent until 2004 and has said it will bid for the remaining shares at $101.50 per share in 2004. The French firm currently has about 67 percent of Gucci. Hit by the strong euro and the SARS virus in the first quarter, Gucci Group, whose fashion brands include Yves Saint Laurent and Alexander McQueen, made a 1.2 million euros profit compared with 35.5 million euros a year ago.
4 September 2003
www.gucci.com
Pinault Printemps Redoute (PPR) has increased its stake to 66.65per cent in luxury goods group Gucci. PPR plans to build its stake to 70 per cent before the end of the year and has an option to buy the entire business in 2004.
3 September 2003
www.gucci.com
Gucci's profits fall 97%
The
world's third-largest luxury group Gucci on Wednesday reported a 97 percent
slide in first-quarter earnings as a strong euro and the SARS outbreak hit sales
of smart bags, fashion goods and perfumes.
The Dutch-listed firm with Italian roots saw net income tumble to 1.2 million euros ($1.39 million) from 35.5 million euros in the first quarter of the previous financial year to end-April. Analysts had expected a drop to 27.6 million.
The company also reported an operating loss of 24.4 million euros versus a profit of 20.4 million the year before, while total revenues fell 6.7 percent to 567.1 million euros.
May and June brought a dramatic turnaround in Gucci's fortunes, however, and there was hope the full year could match or exceed last year's net profit despite the grim first quarter, chief executive Domenico de Sole told Reuters in an interview.
Gucci, which has American designer Tom Ford as creative director and counts Yves Saint Laurent, Stella McCartney and Alexander McQueen among its fashion brands, is majority-owned by French retailer Pinault-Printemps-Redoute (PPR).
June 3, 2003
www.gucci.com
€1.3bn windfall for Gucci investors
Luxury goods group Gucci announced plans to return €1.3bn (£710m) to shareholders after admitting it had run out of ideas about what to do with its cash pile. The move amounts to a windfall for Pinault-Printemps-Redoubt, the French retailer that has a 63% stake in Gucci, and reduces the price PPR will need to pay to buy the shares it does not already own in the Italian group.
Under the terms of a deal clinched just before the terrorist attacks on September 11, PPR is committed to buying the outstanding shares in Gucci at $101.5 in April 2004. But this price will now be reduced to around $85 to take account of the capital redistribution.
Domenico De Sole, president and chief executive of Gucci, said the group no longer needed the surplus cash for its own business development plans. "We continue to focus our attention and energy on growing all our operations and we do not expect to make significant acquisitions in the near future," he said.
No longer a single brand company focused on Gucci, the company now also owns
luxury brands such as Yves Saint Laurent, Roger & Gallett and British designers
Alexander McQueen and Stella McCartney after expansion and acquisitions.
Gucci is due to give details of its first-quarter trading in July, and as it
has a strong exposure to the US market is expected to give a clear indication
of the impact of the Iraq war on consumer spending.
3 June 2003
www.gucci.com
Gucci moves east
It seems that when all else fails, one can always turn to Tokyo. The Gucci group announced last week that the company will open a 10,800-square-foot flagship in Tokyo's Ginza district in spring 2005. Perhaps this move was inspired by the recent successes of the extravagant new Hermes and Louis Vuitton stores. Because it seems that no matter how broke Japanese ladies are, they would rather starve than not buying a new Kelly bag.
April 18, 2003
www.gucci.com
Gucci's profit drops 27%
Italian luxury goods company Gucci Group NV, reported a 0.8 per cent decline in sales to GBP 1.7bn in the year ended January 31st. Net profit dropped 27 per cent from GBP 215.9m to GBP 156.7m. The Gucci division mostly caused the fall, where sales slid 9.6 per cent.
European sales for the Gucci division dropped 4.5 per cent to GBP 346.6m. Sales on the US market plunged 16.9 per cent to GBP 222.3m and sales in Asia endured a 9 per cent decline to GBP 466.5m.
While the company's main brand suffered the effects of a poor business climate, the Yves Saint Laurent business witnessed a sales jump of 44.7 per cent to GBP 101.2m. However, this division failed to drag itself out of the red posting a loss of GBP 44.8m.
The Gucci clothing division recorded a 13.2 per cent slide; sales in its core leather goods business decreased 11 per cent and the watch sector suffered an above average fall in sales of 16.7 per cent. The jewellery sector was the only one to record a plus of 16.4 per cent.
The Gucci brand was not only affected during the year by the general economic slowdown but also by weaker demand in the tourist markets. These negative factors are likely to make themselves felt during the current year, the management said.
March 29, 2003
www.gucci.com
Gucci group sees late sales surge
Pinault-Printemps-Redoute (PPR), the French retail and luxury goods group that controls Italian luxury champion Gucci, on Wednesday unveiled standstill results for 2002, but saw a sharp up-tick during the final months of last year.
Although sales at PPR fell 1.5 per cent for the year to 27.4 billion EUR, chief executive Serge Weinberg said retail sales had risen 3.5 per cent in the quarter ending 31 December, with luxury sales up 3.8 per cent.
The Printemps and La Redoute department stores, together with a string of mail-order catalogues and the leisure retailer Fnac, are beginning to deliver benefits from investment in expansion. The growth was boosted by the first full-year contribution from the Italian luxury brands, Balenciaga, BottegaVeneta and DiModolo, acquired in 1991.
March 7, 2003
Gucci ad not banned
Calls to ban a controversial Gucci advert, showing a model with her pubic hair shaved into the company's logo, were rejected by the advertising watchdog on Wednesday. Model Carmen Kass was pictured semi-clad inside the February edition of Vogue magazine, pulling down her knickers to reveal Gucci's trademark "G" symbol, with a male model crouching between her legs.
The picture is the work of Mario Testino, one of Princess Diana's favoured
photographers, whose subjects have also included Robbie Williams and Madonna.
The advert sparked a rush of tabloid condemnation, with the Daily Mail columnist
Bel Mooney condemning its creators as "no better than pimps and those who
advertise sexual services in phone boxes".
But it failed to outrage the British public, attracting a relatively subdued
sixteen complaints to the advertising standards authority claiming was "offensive
and sexually suggestive". By contrast, Yves Saint Laurent's notorious Opium
advert featuring a naked Sophie Dahl provoked 730 complaints to the ASA. This
was mainly because it appeared on poster sites, where it could be seen by children.
The ASA said today it accepted Gucci's argument that the advert appeared in magazines targeted at "modern, fashion-conscious and sophisticated adults", and not children. "The authority considered that the execution had been carefully targeted and that its sexual nature was unlikely to offend the fashion conscious readership," the ASA said, adding that although it was likely to be considered tasteless by some readers it was "unlikely to cause serious or widespread offence".
www.gucci.com
February 27, 2003
De Sole dismisses departure rumours
Rumours surrounding the fate of Tom Ford and Domenico de Sole at Gucci Group have reached a fevered pitch in recent weeks, with many trade publications pointing to the impending withdrawal of Gucci's two star players when their contracts expire in 2004.
French retail group Pinault-Printemps-Redoute (PPR), which presently owns 59.3 per cent of Gucci's shares and plans to buy all freely traded Gucci shares by March 2004, could consider changes at the company's helm if its 101.5 USD per share offer is successful, observers believe.
But Group CEO De Sole dismissed these rumors on Friday in Italy's "La Repubblica" as well as in Tuesdays "Il Corriere della Sera," in which he stated that he and Tom Ford would stay on board beyond 2004, as long as the company continues to embrace the independent management style they instituted.
Mr De Sole, who has been with Gucci Group for twenty years and was appointed
as chairman and CEO in 1994, has now made clear that he not
only has no problems whatsoever with Paris-based PPR, but would also renew his
contract "if Gucci's independence in management is guaranteed in the future".
www.gucci.com
February 27, 2003
Gucci warns YSL may miss 2004 profit target
Shares in Pinault-Printemps-Redoute fell five per cent on Wednesday after Gucci, its luxury goods division, warned that Yves Saint Laurent would not be profitable until 2005, a year later than expected. Gucci had initially expected YSL, acquired for one billion USD in 1999, to break even in late 2003 and to report a full-year profit in 2004. However, Domenico De Sole, chief executive, told analysts on Tuesday that YSL could miss the target set out in its original five-year plan.
"We have to be realistic and say that, given the current economic environment and the likelihood of a war in Iraq, the first full year of profitability for YSL is likely to be 2005 rather than 2004," Gucci said on Wednesday. "We will still breakeven at the end of 2004."
Gucci's shares have held up better than rival luxury goods groups over the
past year thanks to a promise from PPR, to buy out other investors at 101.50
USD a share in 2004. Serge Weinberg, chief executive of PPR, is to sell the
French conglomerate's sprawling business-to-business arm by the end of 2004.
February 14, 2003
www.gucci.com
Gucci appears in a bad light
A former saleswoman in Boston claims designer leather retailer Gucci discriminated against her by failing to accommodate her medical handicaps stemming from cancer treatment. Rosanne Bova worked for Gucci's Copley Place store for nearly fourteen years until she left last August.
In charges to be detailed on Thursday, Bova claims managers of the high-fashion shop demanded that she worked fourty hours a week - and more during certain periods - a considerable hike from the thirty hours she had been working. Bova also says Gucci insisted on the longer schedule despite her claims that because of her cancer, she couldn't handle it.
Bova, treated surgically for breast cancer in 1998, maintains that side effects from the anticancer drug Tamoxifen and the antidepressant drug Paxil left her no choice but to stop working at the store last summer. The Gucci manager who came on board the week before Bova left, says Bova never mentioned her medical condition when discussing her hours with her or an interim manager.
In addition, she says, Bova phoned in her resignation without giving Gucci adequate time to address her note from a nurse practitioner. "The corporate wrongdoer is a women's retailer who understands women's beauty needs, but they don't understand women's health needs,'' said Bova's lawyer, Herbert Holtz of Boston.
February 7, 2003
www.gucci.com
PPR raises Gucci stake
Gucci, the Italian fashion group, announced last week that the French retailing corporation Pinault-Printemps-Redoute (PPR) now owns 54.1 per cent of its regular shares. Between October 17 and December 23, the French group bought a total of 1,097,323 Gucci shares (0.9 per cent of capital) on the Amsterdam and New York stock exchanges.
PPR agreed in September last year to acquire all outstanding shares in Gucci in April 2004 at a minimum unit price of USD 101.5. Under the terms of that agreement, the French group may raise its stake in Gucci to as much as 70 per cent in the meantime.
The latest transactions, which cost PPR an average of USD 92.95 per Gucci share,
are an attempt to decrease the price of that commitment. PPR's recent sale of
parts of its office supplies subsidiary Guilbert (825m euros) is thought to
have generated some of the resources needed for the French group's Gucci share
acquisitions.
3 January 2003
www.gucci.com
Gucci issues profit warning
Italian luxury goods maker Gucci Group warned on Tuesday profits may decline next year amid "difficult" trading conditions.The world's third-largest luxury goods company, joins its biggest rival LVMH Moet Hennessy Louis Vuitton, in blaming an economic slowdown and the September 11 attacks for a sharp decline in profits.
Gucci, which owns the Yves Saint Laurent, Sergio Rossi, Alexander McQueen and Stella McCartney brands, also said on Monday net income halved to $56.3 million in its third quarter ending October 31, compared with $114.1 million in the same period a year ago.
"Management believes trading conditions for the luxury goods industry will remain difficult in the coming months and accordingly is particularly cautious for 2002," the company said.
www.gucci.com
December 20, 2002
Tom Ford wins VH1/Vogue Award
Winners of the 2002 VH1/Vogue Fashion Awards were announced this week in New York at Radio City Music Hall. The event aired live on American television network VH1 and was hosted by actress Debra Messing, know from the hit series “Will & Grace”. The annual award fest is renowned for its unprecedented mixture of designers, models, rock stars and show business.
This year Tom Ford walked away with the Designer of the Year Award. His colleague Alexander McQueen snapped up the Revolutionary Designer Award. Singer-turned-actress-turned-fashion designer Jennifer Lopez was proclaimed the 2002 Most Influential Artist, her unique style cheered by the jurors. Designer Ralph Lauren was honoured for his 35 years of groundbreaking work with a tribute presented during the telecast by P. Diddy, Oprah Winfrey and Penelope Cruz.
Other winners of the 2002 "VH1/Vogue Fashion Awards" are: Breakthrough Style Award, Eve; Rockstyle Award, Steven Tyler; Red Carpet Award, Gwyneth Paltrow; Leading Man Award, Hugh Grant; Newcomer Award, Kieran Culkin; Model of the Year Award, Karolina Kurkova. The 2002 "VH1/Vogue Fashion Awards" featured live performances by Pink,
David Bowie and Santana.
October 17, 2002
Gucci made-to-order
A limited edition Gucci bag made to order will undoubtedly turn into a trendy collectors item for those who can afford it. Gucci’s vice president Tom Ford discreetly introduced the concept during the Paris’ show this summer in presenting the winter collection. The personalized luxury bags will be available in stores in November. Gucci will limit the collection to stores in London, Paris, Milan, Rome, Beverly Hills and Tokyo.
Clients can customize their bags by choosing size, leather and color, or they can have their name initialed onto the back of their bag of choice. Gucci expects to offer six or seven bags based on classic models from Gucci's archives as templates.
Gucci will produce the bags in limited series to probably at most 500 examples per look.
Prices will start somewhere around $1,500, and will climb to $15,000 for larger versions in crocodile.
www.gucci.com
august 6 2002