The Younger Pinault: Nouveau Titan Enters The World of Luxury

Artemis chairman François-Henri Pinault, the luxury world's new titan-in-training, discusses dealings with Gucci and his vision of PPR’s future.

PARIS — Artemis chairman François-Henri Pinault, the luxury world’s new titan-in-training, already seems to know when not to stand in the way of fashion creation.

In an interview, Pinault said negotiations to renew the contracts of Gucci Group creative director Tom Ford and chief executive Domenico De Sole have been sidelined while Ford works on upcoming collections for Gucci and Yves Saint Laurent.

This story first appeared in the June 17, 2003 issue of WWD.  Subscribe Today.

“We’re talking, but we’re taking our time,” he said. “Nevertheless, we won’t talk all year.”

Pinault declined to provide specifics, but dismissed suggestions that the talks, heavily scrutinized in the media, have been contentious.

“All of the hullabaloo came from an interview my father [François Pinault] gave to The Wall Street Journal,” he said. “His remarks that a brand is more important than a designer were taken out of context. It was understandable that Tom had to respond. In context, my dad’s remarks were logical. Coco Chanel is dead, but Chanel the brand still lives. It’s obvious that a brand can outlive a designer. Just look at history.”

And Pinault is no slouch at fashion history. Though he is just stepping into the glare of the media spotlight, he actually got his first taste of the fashion world long before his father, the retail and luxury tycoon, took control of Italy’s Gucci Group in 1999.

After graduating from business school in 1985, the young Pinault spent 18 months working for the French Trade Commission in Los Angeles in charge of helping Gallic fashion and accessories companies gain a foothold in the American market.

“The highlight was when I was asked to organize the first haute-couture show on the West Coast,” remembered Pinault, sitting last Friday in his minimalist headquarters here, designed by architect Rena Dumas. “It was 1986. We assembled an exhibit on fashion and design. For the opening night, we did a charity gala with a huge Jean Patou fashion show. [Christian] Lacroix designed Patou then. We became friends and he invited me to the shows he did for Patou in Paris.

“It was a great time,” he enthused. “I did all of the seating. I had to find a lot of the models. Doing the casting was a blast.”

He may not be casting models anymore, but after assuming the reins to his father’s far-flung empire, the easy-going and articulate Pinault, 41, once again finds himself in the midst of the fashion fray.

Last month he succeeded his father as chairman of Artemis, the family holding company that retains a controlling 42.2 percent stake in the Pinault-Printemps-Redoute luxury and retail conglomerate. PPR in turn holds 63.7 percent of Gucci.

Although the elder Pinault remains a presence in the group, which also includes the Christie’s auction house, the Chateau Latour winery, a theater in Paris and a French soccer team, François-Henri now holds the preponderate role in operational decisions.

And he’s sure to be put to a quick test. For one, he faces PPR’s controversial commitment to buy at $101.50 a share all of the Gucci stock it doesn’t own next March. As reported, PPR can buy up to 70 percent of Gucci before the end of the year. Late last month, Gucci reduced the price per share PPR will pay by $16 by agreeing to pay shareholders $1.58 billion, although the proposal still requires the approval of Gucci shareholders.

“People will only know if we overpaid for Gucci if the future profits don’t justify the price,” he said. “In 1991, when [PPR] bought Conforma [the furniture chain], we paid 30 to 40 percent above what most companies were getting. We also were criticized for the price we paid for Fnac [the music and book chain]. If we were to sell Fnac now, it would bring five or six times above what we paid for it.”

Not surprisingly, the young Pinault embraced PPR’s recent move away from business-to-business activities in favor of the higher-margin retail and luxury worlds. And he’s unwaveringly bullish on the outlook for luxury, despite its current downturn.

“There will be another boom in the luxury sector,” said Pinault. “At present, the market is Japan, Western Europe and the United States. Tomorrow it will include China and the rest of Asia, which will be more important in terms of volume than Japan. Add to that all of the countries in Eastern Europe. As the population gets richer, they will aspire to luxury brands.”

Despite his early experience in the fashion world, Pinault still is adapting to some of its ways. He conceded that he wasn’t accustomed to the media attention generated by Ford and De Sole’s ongoing contract negotiations, which, in some ways, have been played out like a sports match.

“The media is really secondary in most of our other businesses,” he said. “We don’t have to deal with everything out in the open. But people don’t know everything. Everything hasn’t been said. Not everything has been made public. There are still secrets in this business.”

De Sole and Ford’s contracts expire next year, in March and June, respectively. Both have said they will remain on board if PPR doesn’t obstruct their freedom to make decisions.

Pinault professed admiration and respect for both men, whom he met in 1999 at a dinner his father organized at his Paris home to celebrate the acquisition that pulled Gucci from the clutches of Pinault’s rival, LVMH Moët Hennessy Louis Vuitton chairman Bernard Arnault.

“I was immediately impressed by Ford,” recalled Pinault. “He spoke in a very precise and very structured way. He’s young. He’s my age. He has a maturity level that is very impressive.”

As he got to know Ford, Pinault said he perceived a complex mind that balanced the artistic and business aspects of the fashion industry with equal facility.

“It’s very restrictive to call him just a designer,” said Pinault. “He’s more than that. He’s an artist. But the creation of the collection is the tip of the iceberg. Beyond that, he’s about building a brand. Everything he does is coherent, from the communication strategy to the concept of the shops. There are very few at his level — perhaps Karl Lagerfeld. Most of the rest are only designers. Tom is a point of reference. I was struck immediately by the impressive mastery he has of his own mind.”

Pinault said he also likes Ford’s ability to switch gears. “It’s nice that someone can talk about marketing with as much ease as the design of the dress,” he said. “He can talk about taste in general, about market trends or about art.”

As for De Sole, Pinault lauded his ability to shine the spotlight on Ford. “They’re really a couple. You only understand Domenico when you see what he’s achieved in Gucci’s back office. The industrial infrastructure is truly amazing. He excels in organizing the machine.”

Pinault said he personally relishes the creative side of fashion. “It’s the most interesting facet of it. I like seeing the designers outside the shows. They’re all very young and open and sensitive. They need relationships and they need to solicit opinion.”

Recently, Nicolas Ghesquière hosted Pinault to a tour of the rarely seen archives at Gucci Group’s Balenciaga. “It was incredible. He showed me the ateliers. For me, it’s like a kitchen. I don’t know how to do anything in the kitchen. I certainly don’t know how to make fashion,” said Pinault, who nonetheless is destined to be a man who has a major hand in the direction of the fashion industry for years to come.

Last season, in Paris, he attended fashion shows for other Gucci stablemates Stella McCartney, Yves Saint Laurent and Alexander McQueen. “I just visited Stella’s shop in London. It’s very Stella. It’s just like a house. Very cozy.”

An avid collector of luxury timepieces, Pinault said he regularly visits the Basel and Geneva watch fairs. “I have some 50 watches,” he explained, flashing a Francois-Paul Journe wristwatch. “I only like extraordinary contemporary pieces. I don’t like the thought of buying a watch that belonged to someone else.”

Pinault, dressed in a light gray made-to-measure Gucci suit, blue shirt and tie, also enjoys the shopping experience. “I do it whenever I can. I love it. Every once in a while I’ll indulge in a custom suit. But there’s one rule: I never take my wife.”

That doesn’t preclude him from going shopping with her. “She needs me to help,” he said. “I have to push her to do it. I’m probably one of the few husbands that do that.”

Pinault didn’t always aspire to becoming a high-powered business magnate. In his teens, he dreamed of joining the professional soccer squad, the Stade Rennais, which was located within a few hundred yards of his childhood Brittany home, in Rennes.

“I played on the junior team as the left wing striker,” he recalled, pulling a battered inscription card for the 1973 season from his briefcase. “I just found this the other day. I wanted to become a pro more than anything. To get close to the players, I was the ball boy for five years.”

Ironically, Pinault’s father acquired Stade Rennais four years ago. “To be on the other side of the fence, finally, after 30 years of dreaming, is great. It took me 30 years to finally get into the locker room.”

After early education in Brittany, Pinault enrolled at Paris’s HEC business school. Soon thereafter, he took management positions within PPR, including the CFAO African trading company and Fnac.

“My management style at PPR was one of developing brands,” he explained. “People wanted me to slow down because I had tons of ideas. I think it’s boring to manage something that is only just doing well.

“I bought a lot of companies,” he continued. “I always thought about ways to leap forward instead of managing with small incremental touches.”

While at Fnac, for example, Pinault orchestrated the acquisition of the Surcouf home electronics retailer. “In its 50 years of existence, Fnac had never bought another company. They just opened stores. When I did it, people thought that I was crazy. But it has become an important, fast-growing part of the business.”

He also founded the Fnac Junior concept, catering to children, and the e-commerce site. When Pinault left Fnac in May 2000 after three years at the helm, sales had grown to some $3.5 billion from $1.5 billion.

At that point, Pinault went on to head PPR’s Internet division. In that role, he gained a reputation for his prudence. At a time when many companies expanded helter-skelter, Pinault stuck to a brick-and-click philosophy, opening sites only for existing PPR brands. Although PPR was criticized at the time, the approach has been validated over time.

Pinault describes his new role within Artemis as that of an entrepreneur. “Now I have final liberty to do what I want and to do it in the way I want to do it. I couldn’t do that at Fnac. I wasn’t supposed to be an entrepreneur. I was a manager.”

Pinault, who likes to play tennis every Monday evening, starts his day at the office around 8:30 a.m. “My schedule is very varied,” he said. “Yesterday, for example I was in London. I’ll be in Switzerland next week.”

When he’s in Paris, he meets every day with his investment teams and confers each morning with Patricia Barbizet, managing director at Artemis. Once a month, Pinault said he meets formally with PPR chief executive Serge Weinberg. “I talk to him every day on the telephone. On certain days we speak several times.”

As for his 66-year-old father, the self-made billionaire who is devoting more of his time to preparing his Pinault Foundation of contemporary art, which will be built by architect Tadao Ando, Pinault said he shares many of the same qualities.

“There are two things I admire about my father,” his son said. “He has an instinctive capacity to surround himself with the right people. He does it by instinct. He seldom makes casting errors. Second, he is constantly questioning his work, his managers, everything. That’s the key to him — he doesn’t like that I say success.”

When asked how he differs from his dad, Pinault quips, “Well, I’m much taller. But seriously, I’ve been asking myself that question for a while now. He’s very instinctive. I’m more imaginative than instinctive. Both of us are difficult to please. We always feel that we can do better and more.”

He added, “My father is a symbol of the entrepreneur. Most people think that the son is more of a manager. I may have started that way — but that’s not the only direction I’m heading in now.”

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