By and  on December 15, 2004

LONDON — No brand disposals, no acquisitions, no major cost cuts and no “massification” drive for Gucci Group, the world’s second-largest luxury goods conglomerate.

Those were the main messages from the company’s new chief executive Robert Polet, who painted an upbeat picture as he presented his long-awaited three-year strategic plan here Tuesday. The plan is to grow group revenues at a compound annual rate of 10 percent, and operating profits even faster.

The industry newcomer announced plans to double the size of Gucci and Bottega Veneta, fix troubled Boucheron and Sergio Rossi and build the company’s emerging designer names — Alexander McQueen, Stella McCartney and Balenciaga — to profitability by 2007.

But despite the fist-pumping optimism he conveyed as he roamed the stage of a lecture theater at the British Museum, Polet disappointed a packed audience of analysts and journalists by failing to give a break-even target for Yves Saint Laurent. He also failed to provide many nut-and-bolts specifics about how he would achieve the bullish sales and profitability targets, saying he did not want to give his competitors too much information.

The market reacted negatively to the lack of specifics, sending shares in Gucci Group parent Pinault-Printemps-Redoute down 1.6 percent Tuesday to close at 76.40 euros, or $101.76, on the Paris Bourse.

“Building on strengths” was the theme of Polet’s nearly two-hour address, and while he sought to distance himself from the previous management — Tom Ford and Domenico De Sole, who made Gucci a case study in brand rejuvenation in the Nineties — he graciously acknowledged the groundwork laid by his predecessors, all the way back to founder Guccio Gucci in 1923.

A renewed focus on the cash cow Gucci brand, which generated 60 percent of 2003 group revenues of 2.587 billion euros, or $3.44 billion at current exchange, and an estimated 141 percent of operating profits, was the centerpiece of Polet’s discourse.

As De Sole and Ford embarked on a drive to create a multibrand conglomerate to rival giant LVMH Moët Hennessy Louis Vuitton, “we did get distracted from the core Gucci brand,” Polet acknowledged.

Indeed, during his first 10 weeks on the job getting acquainted with the fashion business after joining Gucci from Unilever’s ice cream and frozen foods division, Polet confessed he “didn’t spend enough time on Gucci, YSL and Bottega Veneta.”

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