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Gucci, or the House of Gucci, is an Italian fashion and leather goods label. It was founded by Guccio Gucci in Florence in 1921.
Guccio Gucci was the son of an Italian merchant from the country’s northern manufacturing region. As a young man, Gucci quickly built a reputation for quality, hiring the best craftsmen he could find to work in his atelier.
In 1938, Gucci expanded and a boutique was opened in Rome. Guccio was responsible for designing many of the company's most notable products. In 1947, Gucci introduced the bamboo handle handbag, which is still a company mainstay. During the 1950s, Gucci also developed the trademark striped webbing, which was derived from the saddle girth, and the suede moccasin with a metal bit.
Guccio and his wife Aida Calvelli had a large family, six children in all, though only his sons—Vasco, Aldo, Ugo, and Rodolfo—would play a role in leading the company. After Guccio's death in 1953, Aldo helped lead the company to a position of international prominence, opening the company’s first boutiques in London, Paris and New York. Even in Gucci’s fledgling years, the family was notorious for its ferocious infighting.
Disputes regarding inheritances, stock holdings, and day-to-day operations of the stores often divided the family and led to alliances.
As Gucci expanded overseas, board meetings about the company’s future often ended with tempers flaring and luggage and purses flying.
Gucci targeted the Far East for further expansion in the late 1960s, opening stores in Hong Kong and Tokyo. At that time, the company also developed its famous GG logo (Guccio Gucci's initials), the Flora silk scarf (worn prominently by Hollywood actress Grace Kelly), and the Jackie O shoulder bag, made famous by Jackie Kennedy, the wife of U.S. President John F. Kennedy.
At the time, brothers Aldo and Rodolfo controlled equal 50% shares of the company, though Aldo felt that his brother contributed less to the company than he and his sons did. In 1979, Aldo developed the Gucci Accessories Collection, or GAC, intended to bolster the sales for the Gucci Parfums sector, which his sons controlled. GAC consisted of small accessories, such as cosmetic bags, lighters, and pens, which were priced at considerably lower points than the other items in the company’s accessories catalogue. Aldo relegated control of Parfums to his son Roberto in an effort to weaken Rodolfo’s control of the overall operations of the company.
Though the Gucci Accessories Collection was well received, it proved to be the destabilizing force that brought the Gucci dynasty crashing down. Within a few years, the Parfums division began outselling the Accessories division. The newly-founded wholesaling business had brought the once-exclusive brand to over a thousand stores in the United States alone with the GAC line, deteriorating the brand’s standing with fashionable customers. "In the 1960s and 1970s," writes Vanity Fair editor Graydon Carter, "Gucci had been at the pinnacle of chic, thanks to icons such as Audrey Hepburn, Grace Kelly, and Jacqueline Onassis. But by the 1980s, Gucci had lost its appeal, becoming a tacky airport brand."
It didn’t take long before counterfeiters ravaged the company’s pomp by flooding the market with cheap knockoffs, further tarnishing the Gucci name. Meanwhile, infighting was taking its toll on the operations of the company back in Italy: Rodolfo and Aldo squabbled over the Parfums division, of which Rodolfo controlled a meager 20% stake.
By the mid-1980s, when Aldo was convicted of tax evasion in the United States by the testimony of his own son, the outrageous headlines of gossip magazines generated as much publicity for Gucci as its designs. Rodolfo’s death in 1983 caused a major shakeup in the company when he left his 50% stake in Gucci to his son, Maurizio Gucci. Maurizio allied with Aldo’s son Paolo to gain control of the Board of Directors and established the Gucci Licensing division in the Netherlands for tax purposes. (This action would later have a drastic impact on the outcome of the company’s dispute with the world’s largest luxury goods company, LVMH Moët Hennessy Louis Vuitton.) Following the decision, the rest of the family left the company and, for the first time in years, one man was at the helm of Gucci. Maurizio sought to bury the fighting that had torn the company and his family apart and turned to talent outside of the company for Gucci’s future.
The firm was named "European Company of the Year 1998" by the European Business Press Federation for its economic and financial performance, strategic vision as well as management quality.
At the helm of Gucci America was Domenico De Sole, a former lawyer who helped oversee Maurizio’s takeover of the company and the purchase of the company’s remaining shares by Investcorp, a Bahrain-based holding company between 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.
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 of 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 Mellow and wanted to take the company’s image in a new direction. De Sole, who had been elevated to CEO, 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.
His scandalous advertisements made the brand synonymous with eternal youth and the mystery of adolescent sexuality. Lauren, as Ford described, was “the only designer to really create an entire world… you know exactly what his people look like, what their houses look like, what kind of cars they drive,” a mantra he would adopt at Gucci years later.
But where Ralph Lauren embodied the WASP culture of New England, Ford created a lifestyle brand for the hedonistic, urban-dwelling fashionistas who emblemized the brand in years past. Ford's 1995 ready-to-wear line for Gucci dazzled fashion critics.
The collection was reminiscent of the Studio 54 jet-set clientele that created a buzz around the label in the 1970s, with its unbuttoned silk shirts and tight velvet hip-huggers. "It was hot! It was sex!" Joan Kaner, fashion director for Neiman Marcus, exclaimed. "The girls looked like they had just stepped off someone’s private jet. You just knew that wearing those clothes would make you look like you were living on the edge—doing it and having it all!"
While Ford’s 1995 ready-to-wear line was met with rave reviews by industry insiders, it was the celebrity following that would propel Gucci back to the top of the industry. In 1995, Madonna appeared at the MTV Video Music Awards to collect an award for “Take A Bow” in head-to-toe Gucci. Soon thereafter, Gwenyth Paltrow graced the red carpet in the season’s signature look, a red velvet tuxedo with an unbuttoned blue dress shirt, and British actress Elizabeth Hurley donned that season’s patent leather spiked boots to a movie premiere.
Celebrities, fashion models, and wealthy young patrons around the world were clamoring for pieces from the new collection. In the years that would follow, nearly every major celebrity in Hollywood came to Ford for formalwear on awards night, and celebrity sightings once again became commonplace in the company’s boutiques.
By his third collection, it became clear that the highly suggestive advertisements and scanty clothing were not passing fads at the generations-old fashion house, but rather the attribute that would set Gucci apart from its competitors. Gucci Group became a publicly traded company in 1995, incorporated in the Netherlands, and listing on the New York and Amsterdam Stock Exchanges. It issued further shares in 1996.
LVMH Takeover Attempt
Arnault balked at the $500 million price tag and was unsure that Gucci could ever be revived. Four years later, he sorely regretted that decision. Prada, in an effort to replicate LVMH's success at consolidation, had purchased a sizeable stake in Gucci Group in an ill-fated attempt to take over the company.
Realizing that his company didn't have the assets to execute the takeover, Prada’s Patrizio Bertelli offered to sell the shares to someone who could: Arnault. Arnault jumped at the chance. In 1999, LVMH staged an effort to acquire Gucci Group through a creeping takeover, purchasing 34.4% of the company’s stock.
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 Gucci. Courts in the Netherlands ultimately upheld the PPR deal, as it did not violate that country's business laws. PPR now owns 68% of the group.
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. 2001 was also an incredible year for the Gucci Group as it acquired percentages of Bottega Venetta, Di Modolo, Balenciaga, and formed a partnership with Stella McCartney.
Current Creative Team
Facchinetti was elevated to Creative Director of Womenswear in 2004 and designed for two seasons before leaving the company after a management dispute.
Ray served as Creative Director of Menswear for three years before resigning in January 2006, citing his inability to create a consistent image for Gucci during his time as head designer. 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. Giannini's Spring 2006 collection was lauded for its color and energy, recreating the buzz around the company's ready-to-wear that was first heard after Ford's 1995 season.
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