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NEW YORK — Domenico De Sole has given up one board seat and gained another.
De Sole on Friday resigned as a director of Procter & Gamble Co. to avoid any appearance of conflict of interest arising from the beauty deal that he and Tom Ford made Tuesday with rival Estée Lauder Cos. Meanwhile, he has joined the board of Italian men’s wear brand Ermenegildo Zegna SpA.
De Sole, 61, has been a P&G director for four years. A spokeswoman for De Sole stressed that he decided on his own that it would be prudent to resign, rather than risk even the appearance of a conflict. She added that De Sole had informed the board in advance of business partner Tom Ford’s plans to make a deal with Lauder, and he kept the board apprised.
“I have greatly enjoyed my work as a P&G director over the past four years,” De Sole stated Friday.
“I am stepping off the board so I can focus additional time on a variety of businesses, including my new venture with Tom Ford and Estée Lauder. It has been an honor to serve this great company and I remain confident about its future successes.”
De Sole and Ford formed a luxury design house, called Tom Ford, with De Sole serving as chairman. Several weeks ago, reports were circulating that the partners had first been in talks with P&G about the possibility of doing a Ford beauty brand. Ford, P&G and De Sole’s spokeswoman all have declined comment.
However, P&G accepted De Sole’s resignation Friday afternoon, effective immediately. “Domenico De Sole has made important contributions to the company and to the work of P&G’s board, for which we are thankful,” said A.G. Lafley, P&G chairman and chief executive officer. “We have benefitted greatly from his wisdom and experience and wish him continued success.”
Meanwhile, Zegna sees De Sole as key to its plans to evolve from a men’s wear leader to a preeminent global brand.
In an exclusive interview at the company’s offices here last week, Zegna co-ceo Gildo Zegna put months of speculation to rest when he simultaneously confirmed the official addition of De Sole to the Zegna board and squelched rumors the De Sole connection would eventually lead to a Zegna-produced Tom Ford men’s collection.
“The Zegna family wants to create more value to the Zegna brand and Domenico will help us do that,” said Zegna. “My responsibility is to Zegna and to utilize De Sole as a partner….He will make us better managers and thus a better brand so that we can maintain [market] leadership.”
As reported, De Sole has been spotted for the past couple of months at Zegna headquarters in Italy and was initially said to be advising the company on its activities in Asia. However, Zegna said De Sole’s role as a board member, which started in an official capacity on March 1, was wide-ranging and that his input would encompass all Zegna initiatives and strategies.
His addition to the board brings its membership to seven and its non-family representation to three.
Over the past five years Zegna has taken aggressive steps to increase its revenue and visibility by developing product extensions, such as its footwear collection, produced through a joint venture with Ferragamo; the launch of the trendier Z Zegna line, and most recently an eyewear license with Italian manufacturer De Rigo.
Yet, according to Zegna, there is still much to be done: “De Sole will help us speed up strategy so that we have quicker results that will bring us further growth, whether in accessories, emerging markets or retail.”
Growth is a top priority for Zegna and his cousin, co-ceo Paolo Zegna.
The company reported that 2004 net profits climbed 14.4 percent to 44.5 million euros, or $55.2 million, from 39 million euros, or $44.1 million, in the previous year.
Consolidated revenues advanced 5.5 percent to 634 million euros, or $786.2 million, from 601 million euros, or $679.1 million, in 2003. Dollar figures are converted from the euro at average exchange.
At the end of the year, there were 408 Zegna stores, 167 of them directly owned by the firm. A year earlier there were 388 units, 141 owned by the firm.