MILAN — Is this a watershed moment for Gucci Group? In a word, yes.
This story first appeared in the March 3, 2003 issue of WWD. Subscribe Today.
For some time now, rumors have swirled about unrest at the helm of the luxury giant. After an incredible 10-year run that rocked the fashion and business worlds, the contracts of Domenico De Sole and Tom Ford are coming due in 2004. And the iron-clad control that defined their success may end up being the sticking point that determines whether they stay with the company.
“We’ve built this company,” Ford told WWD, in an exclusive interview. “We have literally hired almost every single person.…We both have an incredible love and loyalty to the company and a desire to continue what we’ve been doing indefinitely, but only if we are allowed to operate in the way that we have in the past. And you’d have to ask François Pinault; this is all going to be really François’ decision, whether we leave or whether we stay. Because it’s up to him whether or not he wants to continue giving us the autonomy that we’ve enjoyed for the last 10 years. But I believe to produce the way we’ve produced, we have to have that.”
When Ford and De Sole took over, Gucci was a laughing stock. Everyone who follows the business of fashion marveled at its near-miraculous ascent during which its chief executive officer and creative director answered to no one but the Gucci board and their own remarkably synchronized guts. Similarly, everyone watched the prolonged, bitter battle during which the white-knight charge of PPR’s Pinault averted a takeover of Gucci by Bernard Arnault and LVMH. Upon resolution of the fray in 2001, the victors all seemed utterly smitten with each other. But now, despite denials all around, rumors have Pinault challenging the autonomy De Sole and Ford have enjoyed. The French industrialist already owns 59.3 percent percent of the stock and by March 2004, due to a complicated stock agreement, just might own all of it.
But something more than the now-infamous stock put — Pinault’s obligation to buy the remaining outstanding shares of Gucci at $101.50 a share — comes due in spring of next year. De Sole’s contract expires in March, and Ford’s, in June. The two garnered indisputable credit for Gucci’s turnaround, and are viewed by many as integral to its future strength. They see PPR as a major investor, and clearly want it to remain just that, with Pinault and PPR chief executive Serge Weinberg having no role in running Gucci’s day-to-day operations. Rumor has it that Pinault begs to differ, and speculation is mounting that Weinberg is getting antsy to become De Sole’s boss. Although both Ford and De Sole maintain that, so far, the PPR brass has not interfered, neither will state categorically that he is prepared to renew when his contract is up. Last month, in an interview with the Wall Street Journal, Pinault said that while he hopes they stay on, Gucci “shouldn’t shake in its boots at the thought that they might someday leave.”
In a conversation on Friday night, the eve of his dramatic Gucci show, Ford discussed his future with Gucci Group. Although stressing his respect for Pinault and Weinberg and emphasizing their current lack of intrusion, he stated clearly that his contract renewal will require an iron-clad promise of complete autonomy. Otherwise, he’ll walk.
WWD: Are the rumors a distraction from your two collections?
Tom Ford: I’m used to working and thinking about a lot of different things all at the same time. I’ve been here a long time. I’ve been through Dawn Mello and Maurizio [Gucci] and Maurizio’s death and Investcorp and the first public offering and the second public offering. I’m used to distraction in that way. I’m actually better, I think, when I have a lot of things going on. So no, I’m fine with it.
As I said in that Vogue story [a feature in the current March issue] — it was for the power issue and they kept asking me, what does power mean to you — power really means responsibility. That’s what power is. It’s an enormous amount of responsibility, so I’m used to that. And I’ve taken on more and more and more gradually over the course of the years and I’ve become, what’s the word, adjusted to it. It’s part of my life and it doesn’t phase me. That doesn’t mean it doesn’t bother me; it doesn’t mean I don’t worry; it doesn’t mean I don’t stay up every night; it doesn’t mean I don’t think about it. But you learn how to deal with it, the pressure and those kinds of distractions.
WWD: What do you worry about?
TF: Well, first of all, I’m always worrying about the collections. I’m always worrying about what I’m doing. Am I doing the right thing? Is it the right shoe? Is it the right bag? Is it the right this? Is it the right that? Then I worry about the company. How is it performing? How is it selling? Is this store looking right, is that store looking right? Do we need to do this? Do we need to move that person there? How’s this, how’s that? Then I’m worrying about other things, the things I’m working on with Domenico strategically. And then on top of that, I’m worrying about the economy. Are we going to have a war? What’s that going to do? Then I’m worrying about the long-term future of luxury goods, you know, where should we be five years from now? Where should we be 10 years from now? Are we moving into China in the right way? Are luxury goods finished for the moment? Is fashion out of fashion?
WWD: How is your relationship with PPR and with François Pinault?
TF: Our relationship is good. We do not interact with François or with Serge, which in my mind is a good relationship. I think that Serge and François are very smart men. I like them. We have a good relationship. We see each other occasionally, we talk occasionally, we see each other at board meetings. But I think that François invested in Gucci Group not only to invest in a brand name but to invest in a management team that had expertise in a field that PPR does not have expertise in. And so I believe that he respects what we do and up until now has really not been involved in the day-to-day management of the company, nor has Serge. And I’m being very honest, which is why I was happy to talk to you because of course I’ve been reading all the things in the papers, in different papers, and I wanted to just set the record straight.
WWD: In the past, have François Pinault and Serge Weinberg been involved at all in running Gucci Group?
TF: Not at all involved in the past.
WWD: Are there indications that they want to become more involved in the day-to-day operations?
TF: I have no idea. If they do want to become more involved in the day-to-day running of the company it will be very sad for me because I won’t be here for that. And I think I can speak for Domenico — although you’d have to ask him the same question — neither will he. Because, and I don’t want that to sound like an egotistical statement, but you can’t be accountable unless you’re able to make decisions. And Domenico and I for the last 10 years have made every decision at Gucci as though we were the owners of the company. Again, I don’t mean that in an egotistical way, but we’ve done nothing at Gucci that we wouldn’t have done if this were our own company. Which was in the benefit, I believe, of the shareholders and of the employees of the company. I mean, we’ve built this company. We have literally hired almost every single person in this company. We both have an incredible love and loyalty to the company and a desire to continue what we’ve been doing indefinitely, but only if we are allowed to operate in the way that we have in the past. And you’d have to ask François; this is all going to be really François’ decision, whether we leave or whether we stay. Because it’s up to him whether or not he wants to continue giving us the autonomy that we’ve enjoyed for the last 10 years. But I believe to produce the way we’ve produced, we have to have that.
WWD: Will that be written into your contracts? How will you safeguard that autonomy?
TF: More than contractually, I would hope that it would be organizationally. I don’t even want to jump to that point. I mean, we began renegotiations of our contracts last summer — general terms.
WWD: Your lawyers were talking?
TF: No, we talk.
WWD: What do you talk about?
TF: What our future for the company is. How we see the next five years, 10 years unfolding for Gucci Group. I can’t really be any more specific than that at this point.
WWD: Under what specific conditions would you renew your contract? What safeguards would you want in place?
TF: Again, what mechanism we’d use, I can’t necessarily talk about right now. But I would have to feel very secure that I could continue to operate in the same way that I’ve operated for the last 10 years. And I believe Domenico would feel the same way — completely autonomous. We have been the drivers of our business. And if we are, if Gucci Group will continue to drive itself, and if François Pinault considers himself an investor, then we’re absolutely on board. If François Pinault and PPR want to become the drivers of the group, then I don’t think we are on board. Which is fine. First of all, a lot depends on the put. A lot depends on whether or not the put happens in March 2004. If it doesn’t, we are still a public company, even though François will assume board control, so maybe you have the same situation, because with 70 percent of the company, you do have board control. However, being a public company would still be in everyone’s best interests — mine, Francois’, Domenico’s, all of ours. If in March 2004 Francois Pinault were 100 percent owner, or even if he isn’t — it’s really up to François, how he sees Gucci Group continuing after 2004.
WWD: What about Pinault’s statement in the Wall Street Journal that Gucci should not “shake in its boots” at the thought of you and Domenico leaving?
TF: I have to be really honest. I tried to think before I talked to you about a word better than “spin,” but I have to be completely honest. I mean, that’s really François spinning, I’m afraid. Listen, I’m not a fool. I know Gucci will last much longer than my lifetime, and will last in many incarnations after Domenico and I leave, if we leave, which we eventually will because eventually we’ll die.
But at this moment in time it would be naïve for anybody to not understand that Gucci Group would suffer and go through a very rough time for, I don’t know, at least a couple of years. Because the entire company is structured for us and for the way we work. We built it; it works the way we work. It is adapted to our idiosyncrasies. You know, it’s funny, because everyone within the organization here doesn’t really necessarily feel they’re an employee. They’re a partner.
We have a unique and very fragile corporate culture that we’ve developed and that we’ve built here, as most large corporations do. In this case it’s probably the extreme because we’ve actually hired every single person. So a lot of the people, yes, they need the money, but they don’t necessarily just work for money. They work for love of what they do. We all are a team; we work for a common goal. We have a very non-political, very direct organization. I think that is very fragile, and I think it would be naïve to assume that it was not fragile. So I’m not egotistical enough to think that Gucci wouldn’t exist without me; if I were in a car accident tomorrow, of course Gucci would exist. It might go through some rough times of readjustment.
But listen, I totally understand and respect François’ spin. I mean, if I were a business man and I made this investment and there were a possibility that Domenico and I might not be here, you know, I’d have to spin it that way. But unfortunately or fortunately, the reality is, it’s just spin.
WWD: Will he read this and be ticked off?
TF: Well, I hope not. Because as I said, I have incredible respect for François. Whether he’s ticked off or not, it’s just the truth. And it’s the reality.
WWD: In the here and now, building the company around the idiosyncrasies of this working relationship has served the shareholders well. But does such a structure make sense for the greater good of the company long term?
TF: I have to tell you that this was a concern of mine three years ago, four years ago, which is why I recruited Alexander [McQueen], Nicolas [Ghesquière], Stella [McCartney], Thomas Meier — everyone that we’ve brought into the company. You know, it was really for the long-term good of the company to bring in the next wave of talent, to encourage talent within the organization.
WWD: What do you feel is your responsibility to all of these people?
TF: That’s one reason I’m still here, and that’s one reason I want to be here after 2004. I mean, I have days when I’m so worn out and so exhausted and I think to myself, “Why am I doing this? I don’t need to do this anymore; this is crazy.” But I have incredible responsibility to all the people that I just mentioned—Alexander, Stella, Nicolas, Thomas Meier — as well as everyone I work with, and the company, to continue working with them, supporting them.
WWD: If roles were reversed, if you had made this enormous investment in this company, you saw the stock drop for whatever reasons, and you started selling off other parts of the empire for cash, do you think you would want to have more of an operational role?
TF: First of all, our stock hasn’t dropped. PPR stock has dropped. PPR is selling off other parts of their business in order to honor the deal. If this company had a pretty good track record and I didn’t have any expertise in the luxury goods sector, I think I would say, we bet on our horse, let’s let it run.
WWD: Has it been tough for you to do these two collections [Gucci and Yves Saint Laurent] with all of this going on?
TF: No, because there’s always something going on at Gucci and in the world. I mean, I think its tough for everyone working in any creative field right now, or in any field, because of what’s going on in the world more than anything. Come on, we’re in a possible war. As much as I love fashion, how important is it really right now? It almost seems silly to open the Herald Tribune and read about fashion right now. Does that sound terrible? I mean, it’s a nice diversion, but lets put it in perspective. It’s a huge industry, it feeds a lot of people, so it’s important. But no, I haven’t been distracted. I get to focus on work, which is great.
WWD: What is Serge Weinberg’s relationship to Gucci?
TF: He’s not involved, which is a great relationship. He’s a great guy. I like him; I respect him. But at this moment he’s not involved in the day-to-day operations of the company, which I think is an ideal relationship for an investor. I think at this moment in time he’s receiving a lot of questions from PPR shareholders, and he needs to be able to satisfy them that he is aware, if not involved, in what the strategy of Gucci Group is. Which he is of course aware, because he’s on the board and he attends all the board meetings.
WWD: Can you envision leaving?
TF: I would really hate to envision leaving, and I’m trying not to envision leaving. I’m trying to be very positive and as I said earlier, I’m very, very committed to this company. Honestly, that’s a true answer. I really have not made any plans other than to be here at this time. I don’t at this moment in time really even like to think about that. That doesn’t mean that I don’t daydream about other things that I’d like to do at some point in my life. But none of them have gotten to that stage of even becoming firm or real in my mind.
WWD: Let me ask you about the talk about Domenico retiring and you replacing him as ceo. Where do you stand on that?
TF: We always knew at some point Domenico would retire. And I’ve always been very involved in the business side of Gucci in terms of strategy. I would be very excited to at some point in the future make the transition from designer to ceo. It’s certainly something that we’ve talked about. There were never any definite plans. You know, it has all been hypothetical. Domenico has not decided yet to retire.
WWD: We have talked in the past about how much you love the business side of the business, and how you embraced it from the start. At the same time, you have said, “I don’t know if I would want to design forever.” Do you still feel that way?
TF: I absolutely still feel that way. I still love what I’m doing; I’m very into it. But I could not imagine designing forever. I do think all of us have a slot in time where we are our consumer, where we can be relevant in shaping the tastes of the world. And no matter how hard you try, no matter how much you fight, a different generation moves into that slot at some point, and your time drifts by. It doesn’t mean you stop. It doesn’t mean you die. It doesn’t mean you can’t contribute in other ways. It’s funny, architects seem to mature in their sixties. They produce their greatest works usually later in life. Other artists or, I don’t know what you want to call it, other professions, I suppose, have a different sort of time period. And this is also personal. Some people are better at certain moments in their life, and have a moment where they can shape and define culture for that moment in time. So I think that we all have a window, and it’s silly to think that you’re going to be relevant forever because you’re not, because you know the next generation is moving up.
WWD: How do you know when it’s not your time anymore?
TF: I don’t know. That’s probably very hard because I think it’s very hard to let go. I think it’s very hard to say goodbye to things that you love, and it’s very hard to realize that maybe just because you love it doesn’t mean everyone else still loves it anymore. I suppose your public tells you. Although maybe that’s not even true, because I think long after some designers have influenced the world culturally, they continue to sell, sometimes even more than they did when they were at their peak creatively.
WWD: Do you struggle with the Gucci-Saint Laurent balance in terms of channeling your creative efforts?
TF: No, not at all. The outside world seems to think I do. And occasionally someone writes “this looks like this” or “that looks like that.” Well, I am the same person, so there are always going to be my own personal signatures and idiosyncrasies stamped on both brands. But I think that I’ve done a good job developing very separated images. I have no problem at all separating them in my mind; it’s very easy for me at this point. Because I think the image that I’ve create at Gucci — it’s become a very clear mythical man and woman. And I think the Saint Laurent man and woman of my incarnation have also become very clear. It’s very clear for me now who these people are. It’s like a film, and you have two characters. One character rarely wants to wear the clothes of the other character. These are two quite different women and two quite different men. At the same time, they’re both of the same generation, so of course, there are occasional overlaps. You know, like when there’s a trend. Let’s say there’s a trend for silver shoes. If I do it at Gucci, it doesn’t mean that Saint Laurent can’t have silver shoes. But the way the Saint Laurent silver shoe is might be a completely different thing. Prada did a silver shoe, too. Everybody did a silver shoe this season. But the Prada silver shoe looks different than the Gucci silver shoe which looks different than the Saint Laurent silver shoe. But it’s a silver shoe.
WWD: I want you talk a bit about your plan that you and Domenico have for the company. Do you think one year? Five years?
TF: We think in all of those — one year, three years, five years, two years. We have a business plan mapped out for the next three years on paper, but beyond that in our minds. I think that it’s quite clear. I’m actually very proud of how quickly we’ve been able to make the changes that we’ve made at Saint Laurent. Our business is terrific at Saint Laurent, growing at an incredible rate. This year we’ll have 55 stores, and I’m really happy with the store design. We’ve moved very quickly, and I’m very, very proud of Saint Laurent.
WWD: Was it a major disappointment to push back the profitability projection?
TF: No. I think one thing you learn in life is you can control a lot of things, but there are also things you can’t control. And as hard as we work and as well as we do our job, we cannot control the global macroeconomy. We just can’t. Certainly Domenico prides himself, and we as a company pride ourselves, on being very transparent and always being very honest with our shareholders. The moment we notice something — I mean, Domenico was the first to announce the Asia crisis before everyone realized there really was an Asia crisis. So we’ve built tremendous credibility with our shareholders, with investors, because of the fact that we have always been honest, and we have a very transparent operation. And that was really the point of making that announcement and not waiting. It was letting investors know as soon as we realized. But Saint Laurent has potential to become as big as Gucci, absolutely. That’s why we bought it.
WWD: What is the growth potential for Gucci the brand?
TF: There is a finite growth potential for luxury brands. I don’t believe we’ve hit it yet with Gucci. I believe there’s more market share to steal; there’s also market share to be developed in developing countries. The product base at this point I think is pretty broad at Gucci. There are a few products — jewelry is growing incredibly at Gucci and has tremendous growth potential. Our jewelry sales — they’re something like 250 percent up, and they have been for the last two or three years. Still, it’s a relatively small business compared to our other business, but it’s performing incredibly well. So there is still growth potential at Gucci in the core brand. But growth in a luxury brand is finite in order to maintain your position as a luxury brand. Which is why we embarked upon the process of building Gucci Group.
WWD: Let’s talk about the people you’ve brought into Gucci Group. Have you discussed the possibility of your leaving with any of them?
TF: We haven’t discussed it at all, and no one has brought it up.
WWD: What do you think the reaction would be, from Alexander or Nicolas or Stella, if you and Domenico were not to renew your contracts?
TF: You would have to ask them. But I would think that they would all be very upset and very disappointed. And it is precisely for this reason, and not only with Lee and Nicolas and Stella and the very obvious, very public faces of Gucci Group, but all the employees, everyone that we work with, that we both feel a tremendous responsibility and love of this company. And I think that’s what drives us to a certain extent at this point in our careers to be here.
WWD: What drives you now, after this tremendous success?
TF: Design, number one. I love what I do; I love designing. That drives me, number one. And by “design,” I don’t just mean clothes. I do mean clothes, but I mean the designs of these individual brands, because that’s a design; that’s a strategy. What are they? What do they look like? How are they going to be built? Where are we going to build them? What do the stores look like? What does the packaging look like? What is the advertising? How do we keep them different? How do we make them not compete with each other? The strategy of the entire thing, the grand design for all of Gucci Group, is what drives me. The second thing that drives me is responsibility, responsibility to the company, responsibility to the shareholders, responsibility to all of the employees. I think as you get older in any job or in life, responsibility is one of the things that keeps you doing what you do. You know, you do get weighed down with responsibility, and I do feel a tremendous weight. But I asked for it. We built it. I got it, and I’m very loyal. So that’s a big driver.
WWD: Do you ever think that to remove yourself from that responsibility, or to have it suddenly lifted from you, might be a relief?
TF: It would be a relief but it would also be incredibly depressing. And of course, I would have to find something to fill that void. I’m not at all worried about that. I think that successful, driven people can be successful and driven in lots of different things. I’ve tried not to actually think about that because the thought of actually leaving Gucci is very painful for me and is something that I just really don’t want to think about.
WWD: If Gucci didn’t exist for you tomorrow, would you go out and try to build a Tom Ford house; would you make movies, what would you do?
TF: I doubt that I would build a Tom For house.
I might buy another company. Or I might build another company. Or I might make a movie. I don’t really know. Honestly, I don’t. I’m not at that point yet. But of course there are things that interest me. I mean, luxury goods still interest me incredibly. I have no interest in this moment in time — and again, you never say never, who knows —in having a Tom Ford collection. I’ve had a Tom Ford collection; I’ve had two of them. I’ve had the luxury of having two and yes, they’ve been for other houses. But so much of my own personal taste and my own vision has gone into them that I’m very creatively satisfied with that. I don’t need to see my name on billboards. I don’t have that desire.
WWD: Why not?
TF: I just don’t. It just doesn’t do it for me.
WWD: Let’s go back to the matter of Domenico’s successor. Theoretically, could a designer be a ceo?
TF: A ceo and designer is not a rare thing in our business. Giorgio Armani, I believe, has been both at certain times in his career. It’s a hypothetical question and too speculative, really. But I hate to even hypothesize about this, because Domenico’s not going anywhere. I love working with Domenico, and I hope that we work together a long time.
WWD: Until Domenico retires, it’s two for all and all for two?
TF: Absolutely. Domenico and I are a partnership. We are unbreakable. We have been together through everything. I would trust Domenico with my life, without question. And I believe he feels the same way about me. We absolutely both believe in this company. Everything we do we feel is in the best interests of the company. We are absolutely inseparable at this point in time.
WWD: How has this company changed since the PPR investment?
TF: At this moment in time it hasn’t changed. And so in that sense, PPR has been an excellent partner, and I hope that that strategy will continue.
WWD: Do you want to say anything else about what you’re feeling right now, about your situation, about when the world will know whether Tom and Domenico are going to stay?
TF: I feel very optimistic. I’m very committed to the company. I’m working very hard. Right now, of course, I’m working on two women’s collections, so I’m particularly focused on design, and usually when I do that I just push everything else out of my mind for a few weeks while I’m really concentrating on the collections. So that’s what I’m concentrating on now. I’m very optimistic and hopeful that we’ll both be here for a long time. I really am trying to be very positive.
WWD: One more time, at Gucci Group you would always demand the same autonomy that you want right now?
TF: That I have right now. It isn’t a question of demand. I could not promise that I could deliver the same kind of performance that I have delivered for the last 10 years without the ability to run the business and to do my job in a way and a manner with the same autonomy. It’s not a demand. It’s if you want me to fulfill a promise, I have to be accountable. And if I’m going to be accountable, I have to be free to make decisions as I see fit. Does that sound terribly egotistical?