By  on November 14, 2007

Mark Lee looks to combine reinvention and consistency in Gucci's business practices.

In 2004, Gucci found itself at a crossROADS.

In the prior decade, the iconic Italian leather goods house had been resurrected as one of fashion's hottest brands, with Tom Ford and Domenico De Sole steering its reinvention. But when the duo exited that year, many wondered just how the brand would keep up its momentum, and some even forecast Gucci's reign could come to an abrupt end.

Not so, according to Mark Lee, who was named Gucci's president and managing director in 2004, and who described how he balances reinvention and consistency at the 85-year-old brand. Lee, who was promoted to Gucci's chief executive officer within a year after joining the brand, explained the two notions run through every facet of Gucci, from design to manufacturing, freestanding retail and global reach.

"I've had the good fortune now in my career to have participated in two different eras of reinvention at the Gucci brand," said Lee, who first joined Gucci in 1996 as worldwide director of its ready-to-wear business before moving to Yves Saint Laurent in 1999. "But as much as I think reinvention is a key word for what we're doing and what we've always been doing at Gucci, I think the word consistency is also very important and I think somehow it's the balance of the two."

And while some fashion critics are skeptical of the somewhat more commercial creative course Gucci has taken under the brand's creative director, Frida Giannini, the numbers prove Lee must be on to something.

In 2005, revenues increased by 18.4 percent, followed by another 16.8 percent rise in 2006. And in the past two years, Gucci shot through the $2 billion barrier in sales. In terms of categories, leather goods, which account for 55 percent of turnover, grew over 20 percent in 2006; footwear increased by 21 percent, and rtw by 19 percent.Lee credited Giannini with forging a new direction for Gucci on the creative front, putting a new spin on brand icons such as the signature logo and vintage scarf prints.

"She's been moving Gucci from the cool, minimalist, sometimes cold, hard glamour, hard sex of the Nineties…toward a warmer, reinvented, richer, more joyful and sensual Gucci for the new millennium," he said, pointing to an edgy 1996 advertising image of a sexually charged couple, and contrasting it with a current ad, which exudes a more sensual sexual energy between the two. "The mythic Gucci couple remains consistent. That couple that still represents the powerful blend of glamour and achievement is alive and well. Power dressing, and that masculine-feminine aspect of women's dressing that was so key in the mid-Nineties is alive and well and reinvented for today."

Maintaining exclusivity, he explained, remains a crucial mantra for Gucci. For one, he said there is a commitment to manufacturing in Italy, citing the example that almost 30 percent of Gucci's suppliers have been working with the brand for three generations. And there are no plans to dilute the brand with additional product categories.

"I would argue that today Gucci remains one of the most exclusive global luxury brands in the world," Lee said. "Gucci is one label, one brand. We have no second lines, no diffusion collections. Seventy percent of our business is done in our own owned and operated retail stores.

"For as long as I'm at Gucci, you're not going to see Gucci hotels, you're not going to see Gucci restaurants, you're not going to see Gucci airplanes and things of that nature," Lee added. "We have enough to do with the main category that we have. And all product categories of Gucci are under our complete direct control with the exception of two [licensed fragrance and eyewear]."

Instead of widening its product reach, Gucci is looking for growth in categories such as jewelry and fragrance and from expansion into new markets. The company currently has 219 units worldwide, with stores in India, Vietnam, Mexico and the Ukraine having bowed in recent months, and plans to add units in the Czech Republic, Hungary, Macau and New Zealand over the next year.China is the brand's fastest-growing market, with 69 percent growth in 2006 over 2005, followed closely by e-commerce, which experienced a 65 percent growth spurt.

Gucci's next big moment of reinvention and consistency is likely to happen in New York early next year, when the company plans to open a megaflagship in Trump Tower. "Gucci has had a retail presence in New York since 1953," Lee said. "It's really going to represent a new benchmark for us in terms of retail. It's a 45,000-square-foot store in gross, and selling will be somewhat around half of that. But it's a fantastic opportunity for us to move up the street and continue this legacy that we've built over a half century in New York City."

Answering questions after his presentation, Lee had the opportunity to address the discord between some fashion critics, who have scrutinized Giannini and her work since she took over complete creative control at Gucci in 2006, and the continued success of the brand.

"I think fashion journalists are sometimes very impatient," he said. "To expect that somebody can arrive and do a first collection and make this kind of transition, make this kind of reinvention in one or two or even three or five seasons, when you're taking a mantle that was built for over a decade…there's a certain impatience.

"I understand," he continued. "The journalist's job is to sit for two and a half weeks and see 300 shows, and eight shows a day and is seeing things in that context. Whereas I think we're working in the context of the Gucci brand and the legacy of the Gucci brand and moving the brand forward for our consumers. So is there a conflict? No, not really. Everybody has their job to do. We read criticism, we take it."

And as for those who compare Giannini's seemingly quieter profile to that of Ford, whose own media profile was inextricably linked with Gucci, Lee said, "Designers become famous because of their work. She's doing exceptional work and day by day, step by step, she's becoming more and more known around the world. And as time allows, she's out and doing interviews and meeting the press. But the reality is she has a huge job to do. She's working, so there's less time to devote the life to being a personality and working on her personal press as there is to running the brand. And she's doing incredibly well on the creative side."

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