By Miles Socha
LONDON – No brand disposals, no acquisitions and no “massification” drive for the world’s second-largest luxury goods company, Gucci Group. Those were among the chief messages from its new chief executive Robert Polet, who painted an upbeat picture as he presented his long-awaited three-year strategic plan here Tuesday.
The Dutchman, a luxury newcomer, announced plans to double the size of Gucci and Bottega Veneta, fix troubled Boucheron and Sergio Rossi and build the group’s emerging designer names – Alexander McQueen, Stella McCartney and Balenciaga – to profitability by 2007.
Still, despite the fist-pumping optimism he conveyed as he roamed the stage of a lecture theater at the British Museum, Polet disappointed analysts by failing to give a break-even target for Yves Saint Laurent and provide enough nut-and-bolts specifics about how he would achieve his bullish sales and profitability targets. The plan is to grow revenues at a compounded rate of 10 percent, and operating profits at a higher rate.
“Building on strengths” was the theme of Polet’s nearly two-hour address, and while he sought to distance himself from the previous management – the dynamic duo of 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 revenues, was the centerpiece of Polet’s discourse.
As De Sole and Ford embarked on a drive to create a multi-brand conglomerate to rival giant LVMH Moet 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 fozen foods division, Polet confessed he “didn’t spend enough time on Gucci, YSL and Bottega Veneta.”
Polet’s goal is to double Gucci revenues in seven years by opening more stores in fast-growing Asia, marching into emerging markets like India and China, leveraging underdeveloped categories like fine jewelry and increasing its communication spend by about 20 percent.
“We are very confident we can do this,” he said.
He expressed confidence in the design trio that succeeded Ford at Gucci – Alessandra Fachinnetti for ready-to-wear, Frida Giannini for accessories and John Ray for men’s wear – noting that wholesale orders for spring 2005 were up 20 percent.
Past Coverage of Robert Polet from WWD:
Analysts’ Mixed Reception for Polet, Thursday, April 22, 2004
The Ice Man Cometh: PPR Dips Into Unilever For New CEO of Gucci, Thursday, April 22, 2004
A Unilever Career Man, Thursday, April 22, 2004
Polet Steps Out in Low-Key Style, Wednesday, June 30, 2004
Polet’s Debut for Gucci: CEO Lauds ‘Mini-Boom’ As Profits Climb 33%, Friday, September 03, 2004
For a full report on Polet’s presentation, and more, see Wednesday’s WWD.