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The Top 10 Stories of 2004: 2. Gucci’s Group

In a year punctuated with high-profile arrivals and departures in the rarefied designer realm — Michael Kors leaving Celine, Julien Macdonald exiting Givenchy, Jil Sander saying goodbye to Prada again, and Perry Ellis losing Patrick Robinson...

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In a year punctuated with high-profile arrivals and departures in the rarefied designer realm — Michael Kors leaving Celine, Julien Macdonald exiting Givenchy, Jil Sander saying goodbye to Prada again, and Perry Ellis losing Patrick Robinson — the biggest news was undoubtedly generated by Gucci Group.

Gucci, a key brand rejuvenation miracle of the Nineties, underwent a different kind of transformation. All told, there was enough upheaval in the management and design departments to keep the Italian brand locked on the front page.

The industry entered the new year still reeling from the bombshell news in late 2003 that Gucci’s dynamic duo, creative director Tom Ford and chief executive officer Domenico De Sole, would exit the multibrand luxury group they built on April 30.

Even as retailers lathered over the possibility of a shopping frenzy for Ford’s collectible final collections for Gucci and Yves Saint Laurent, speculation mounted over how Gucci Group parent Pinault-Printemps-Redoute would fill the enormous shoes of the two men.

On the design front, Alexander McQueen was immediately touted as a lead contender to succeed Ford at YSL, and then, later at Gucci.

Meanwhile, PPR quietly engaged two executive recruitment firms to find De Sole’s successor — and it quickly became evident the search went beyond luxury and fashion into industries such as retail, fast-moving consumer goods and food and beverages.

But still, the show must go on, and Ford delivered four farewell shows for the season, including an electrifying tour de force in Milan for Gucci last March that climaxed with a shower of rose petals and diva Ultra Nate blaring on the soundtrack, “You’re free, to do what you want to do!”

“I’m so proud,” declared a teary-eyed Dawn Mello, the longtime fashion executive who recruited Ford from Perry Ellis to Gucci in 1990.

Behind the scenes, however, acrimony was reaching a bilious boil. In an interview with WWD, Ford blasted PPR chief executive Serge Weinberg for being “naïve” about fashion and for implying that salary demands were the deal-breaker in contract negotiations. “I realized that I have nothing to learn about luxury from Serge Weinberg,” Ford said.

This story first appeared in the December 7, 2004 issue of WWD.  Subscribe Today.

Weinberg retorted, “His presentation of the negotiations is completely inaccurate.”

Simultaneously, PPR was finalizing its plans for the post Tom-and-Dom era. Rather than selecting big-name design talents to succeed Ford, it elevated four of his design lieutenants: Alessandra Facchinetti, Frida Giannini and John Ray for Gucci women’s ready-to-wear, accessories and men’s rtw, respectively, and Stefano Pilati for Yves Saint Laurent.

Then, just as PPR was buying up the remaining shares of Gucci it didn’t already own, effectively delisting the company for a total purchase price of 7.2 billion euros, or about $9 billion at the time, the other shoe, or should we say loafer, dropped. Robert Polet, the head of Unilever’s $7.8 billion frozen-food division, would be trading ice cream and fish sticks for handbags and stilettos as the new ceo of Gucci Group.

Touted by PPR as a charismatic leader, Polet would join an industry largely skeptical of outsiders on July 1. The Dutchman made his debut before journalists and analysts in early September when PPR presented its second-quarter sales, and told them he was energized by the talent and potential within the group.

He made no further public comments, even as key executives and creative staff exited the company, among them chief financial officer Robert Singer, Gucci Japan president Toshiaki Tashiro, Boucheron creative director Solange Azagury-Partridge, communications executives Lisa Schiek and Tomaso Galli and the presidents of Stella McCartney and Alexander McQueen.

But the biggest and most unexpected shakeup would come in October, when Gucci ceo Giacomo Santucci’s employment was “terminated” amidst accusations of disloyalty and exorbitant salary demands, and the brand’s worldwide merchandising director, Tom Mendenhall, submitted his resignation to join Singer at Abercrombie & Fitch.

PPR moved swiftly to quell market fears, naming YSL ceo Mark Lee to succeed Santucci, even as Polet maintained the Gucci ceo title in the interim. James McArthur, Gucci Group executive vice president, was asked to fill in for Lee at YSL until a permanent successor is found.

The shift of Lee to Gucci raised new questions about the turnaround prospects of money-losing YSL, especially since Pilati received lukewarm reviews for his first runway effort. Facchinetti fared better — with some exceptions: Retailers loved her collection, but editors weren’t yet smitten.

Polet is slated to unveil his strategic plan for Gucci Group this month, which should answer many of the questions left dangling since the management shift. Market sources suggest Polet is likely to give assurances that PPR will remain committed to luxury to counter suggestions it would go down market with some of its brands. Meanwhile, analysts say cost control is likely to be another key message, with some hoping Gucci Group might part with some of its struggling acquisitions, such as Boucheron.

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