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LONDON — After 14 months on the job as chief executive of Gucci Group, Robert Polet is no longer a luxury rookie, from the polished tips of his bespoke horse-bit loafers to his very “up” take on the industry.
Indeed, with the Gucci brand roaring ahead and several other group labels showing sharp improvement, the affable, low-key executive can even afford to boast a little.
“I very strongly believe that the big trend we are absolutely leading is the consumer trading up,” he said in an interview in his sun-drenched office on Grafton Street here. “It is not a surprise to us at all that Bottega Veneta is growing so fast, because it’s leading the trend to higher-quality products where price is not an issue.”
Also in that vein, Polet proudly reported that Boucheron in recent weeks sold three major pieces from its latest “haute” jewelry collection — at prices ranging from $800,000 to $1.5 million.
Meanwhile, at cash cow Gucci, the top-selling leather handbag in the first half of the year sells for 800 euros, or $976 at current exchange — 200 euros, or $244, more than the bestseller a year ago.
That Polet’s upscaling strategy for the world’s third-largest luxury group is bearing fruit must be a sweet reward for the former Unilever frozen-foods honcho, who has been dogged by speculation that he would drive the conglomerate down-market.
In fact, Polet, long a fan of high-end suits and shoes, insisted he has never felt like a fashion outsider.
The main difference between fast-moving consumer goods and luxury, he said, is “the huge freedom creative people have and the huge role creativity plays in maintaining the health of our brands,” as well as the need to “manage for scarcity” rather than mass volumes.
In a wide-ranging conversation, Polet gave a progress report on his strategic plan, elaborated on his vision of the various brands and reiterated his lack of interest in acquisitions. The 50-year-old even revealed himself to be a bit of a gadget guru.
Demonstrating the same fist-pumping enthusiasm as he did last December when he told journalists and analysts he would double the size of Gucci in seven years and bring loss-making brands into the black within three, Polet said he is “totally convinced” the group is on track.
“We’re riding our own, self-created wave,” he said, smiling broadly. “We are delivering on our promises.”
As parent PPR said earlier this month in disclosing a 12.5 percent jump in first-half net profits, Bottega Veneta earned 2.1 million euros, or $2.7 million at average exchange, in the period, and Balenciaga is ahead of schedule and could reach breakeven soon. Boucheron is also ahead of schedule on the road to profitability, Polet added.
He could not be drawn into many specifics on Yves Saint Laurent, and he has stridently resisted setting any break-even deadline for the fashion house, which in the first half narrowed losses slightly to 40.1 million euros, or $51.6 million, from 44.1 million euros, or $54.1 million, a year ago.
Still, “We did set goals for the [YSL] business … and it knows where it’s going. We know exactly what we’re doing and we’re going to take the time it needs to find its sweet spot,” he said, using a favorite tennis analogy.
“Rome wasn’t built in one day, and a brand isn’t repositioned in three, four or even five years,” Polet continued. “Mark [Lee] did an outstanding job at YSL,” he said, referring to the current Gucci brand ceo, who was succeeded at YSL by Valerie Hermann. “With our eyes open, we have invested in our retail network before having the turnover.”
YSL currently operates 63 freestanding stores worldwide.
The fashion house is expected to get out of the red when revenues reach about 300 million euros, or $384 million at current exchange, to 350 million euros, or $448 million.
Meanwhile, Polet said Sergio Rossi, Alexander McQueen and Stella McCartney are all “well on their way” to achieving their break-even goals.
Having previewed McQueen’s new sneaker designs for activewear giant Puma, Polet called them “absolutely spectacular.” Meanwhile, he said he was “hugely excited” to see McCartney’s one-off collection for H&M reach stores in November and to preview her second activewear range for Adidas.
As for the core Gucci brand, it is Polet’s proudest achievement. He noted that constant-currency growth in the first half stood at 19 percent, well ahead of the 10 percent compound annual growth needed for the brand to double in size to more than $4 billion.
Polet said he reviewed and had input on the three-year strategic plans for all its brands. “We will be successful in achieving our plan and we will have profitable brands,” he said.
While Polet largely has shunned the spotlight since joining the fashion industry last July, he described the dramatic shift in the management structure he engineered.
“We went from a leadership of two to a leadership of 20,” he said, referring to the Tom Ford and Domenico De Sole era, when the former was group creative director and the latter ceo. “Now we have 11 ceo’s [including Polet and Chantal Roos of YSL Beauté] and nine creative directors,” Polet said, also stressing the preeminent task of finding “the right person for the right job.”
“That unleashed so much energy, so much creativity, which I think is at the root of our growth, and profitability increases,” Polet said, clenching and unclenching his hands for emphasis.
“To make that new organization work, it seems easy,” he continued. “But you don’t just let it go. It’s a very delicate process, staying involved, but really making sure the teams feel responsible. I need to orchestrate, to stay on as a coach, as a leader.”
Out of nine brand ceo’s, six have been in their current jobs for 16 months or less. As for the design departments, Polet waved off speculation there might be more designer changes at Gucci or elsewhere. What’s more, he defended the decision not to appoint a new creative director at Boucheron following the exit last year of Solange Azagury-Partridge, a key hire of Ford’s.
“Boucheron is a brand that operates in the high jewelry segment,” Polet said, noting that most of its peers do not have a single designer as the front person of the brand. “The products are created in a different way than fashion.”
While Polet has raised some eyebrows in the industry by extolling market research and focus groups, the executive insisted “insight into consumers” will be a key ingredient in fueling the group’s continued success. “The intuition of our designers, teamed with insight into our customers — that is the golden combination,” he said.
Polet acknowledged that a major advertising campaign in July and August to introduce Gucci’s new La Pelle Guccissima range of leather goods might have created an impression that the Italian brand was pursuing a more commercial, product-focused image rather than the cutting-edge brand-building campaigns seen during the Tom Ford era.
But that idea is nonsense, he replied. “Ready-to-wear will always be an extremely important part of feeding the image of the Gucci brand, but we also want it to be more successful in our sales,” he said, acknowledging a less-than-stellar performance for the category in recent years.
Given the ouster of Alessandra Facchinetti as rtw designer only weeks after her second show as Ford’s successor, Polet characterized the women’s fashion department as “in a transition period.”
Still, he said he spied a particular opportunity with rtw — particularly men’s — and asserted that demand for tickets to Frida Giannini’s first full-scale show on Sept. 28 during Milan Fashion Week is “intense.”
“The essence of branding is to stay consistent,” he stressed. “I am convinced we are not in the business of selling handbags and shoes. We are in the business of selling dreams: dreams of the world of Gucci, the world of YSL, the world of Bottega Veneta. People buy products from those brands to buy into those worlds.”
When he first joined Gucci Group, Polet acknowledged he had some trepidation about the multibrand model, a relatively recent development in the still-young luxury goods sector. Today, he said he has a deeper understanding of how its brands benefit from group-level initiatives, from centralized human resources and media planning to a flexible approach to capital expenditure and store management. For example, he gestured out of the windows of his office to nearby Bond Street, where a Sergio Rossi unit was recently converted to Bottega Veneta. “And that took three months, from decision to implementation,” he noted.
Gucci’s expertise with leather goods production also ranks as a key supply-chain synergy, since both Yves Saint Laurent and Sergio Rossi have their handbags and shoe production managed by the experts at Gucci. “There’s a huge amount of knowledge and skills transferred between brands,” he said.
Not that he’s looking to add any more.
Rival luxury titan Bernard Arnault of LVMH Moët Hennessy Louis Vuitton said earlier this year he would entertain the possibility of acquisitions in the medium term. Asked if he had any change of heart, Polet said he “would not be distracted” from the work at hand.
“We’ve got so much on our plate,” he said. “We need to continue delivering on what we said we would do — that is the primary focus of the group.”
Polet said it’s important not to take a monolithic view of luxury, as there are multiple trends at play. For example, while the “use of logos and icons is appreciated” by many luxury clients, others gravitate to Bottega Veneta’s mantra: “When your own initials are enough.”
“You need to tailor the offering of your brand to different types of markets. This can even be in one country,” he said.
For example, he noted that two California Gucci stores, only 90 minutes apart by car, have vastly different clienteles. At its Costa Mesa, Calif., location, a big selection of logo-heavy merchandise, leather and handbags is in demand, whereas shoppers at Gucci’s Rodeo Drive (in Beverly Hills, Calif.) location are more interested in rtw, especially fashion-driven items.
Polet is keenly interested in consumer behavior and how it changes.
With Thomas L. Friedman’s “The World Is Flat” on his current reading list, Polet became extremely animated talking about the technology that is changing the way humans communicate and consume and transforming the world into a “24/7 economy.” As impressive as Gucci Group’s videoconferencing network is, Polet said he’s just as thrilled with the 40 euro, or $48.80 at current exchange, camera that allows him to see and converse with his college-age daughters, Anne-Christine and Francine, via Amazon.com’s messaging service. “Isn’t that fantastic?” he asks.
And he doesn’t only use such technology to keep in touch with his family. Polet also reaches out to business associates in high-tech ways. Before the interview, he used his mobile phone to send a text message to McCartney to wish her a happy birthday.