PARIS — Robert Polet, chief executive of Gucci Group, assumed the helm of the Gucci brand Wednesday, tersely announcing that the employment of Giacomo Santucci had been “terminated.”

This confirms a report in WWD Tuesday that Santucci was about to exit the $1.9 billion luxury brand.

Polet declined to elaborate on the decision, but a memo distributed to Gucci staff clearly spelled out his dissatisfaction.

“It was a difficult decision to take, but it was a necessary one,” Polet wrote in the memo. “I can’t expect anything but total loyalty, commitment and dedication from the ceo’s and top managers at all of the fantastic brands that are part of the Gucci Group.”

Pinault-Printemps-Redoute, parent of Gucci Group, also declined further comment. Santucci did not return phone calls.

But it is understood Polet’s takeover of the Gucci ceo role is not necessarily a permanent one and that external and internal successors would eventually be considered. Industry sources consider Mark Lee, ceo of Yves Saint Laurent, among the top internal candidates, along with Bottega Veneta’s Patrizio Di Marco, although some question whether Lee would be plucked from his delicate turnaround effort.

As reported, tensions between Santucci and PPR brass had reached a boiling point in recent weeks over issues of strategy, compensation and job responsibilities.

“A lot of people reported to [Santucci] and they never heard from him,” said one employee on Wednesday. “There were serious problems. I’m not surprised he’s leaving.”

Another source echoed the point: “Giacomo didn’t really have a relationship with the managing directors in certain geographical areas like Hong Kong.”

Nevertheless, Polet’s internal memo went on to thank Santucci for his contributions to Gucci’s development over the years, especially in the key areas of logistics and operations.

Polet also assured that Gucci would maintain its “commitment to quality, creativity and craftsmanship,” and held out hope that “all the talented and dedicated people who make the brand what it is today” would continue working together to create “the greatest luxury brand in the world.”

Santucci’s exit marks a dramatic end for a high-profile fashion manager, who joined Gucci in 2001 after an eight-year career at Prada. It also ushers in yet another period of uncertainty for a brand still rocked by the departures last spring of Tom Ford and Domenico De Sole, the duo who engineered its turnaround in the Nineties.

This story first appeared in the October 21, 2004 issue of WWD. Subscribe Today.

A chief protégé of De Sole’s, Santucci was one of the executives touted by PPR to be newly empowered after the exits of De Sole and Ford, who took a hands-on approach to all the brands, especially in areas of marketing and communications.

At the time of Polet’s appointment last April, PPR ceo Serge Weinberg declared, “We were not looking for someone to do the job of our chief executives,” alluding to the prowess of Santucci, Lee and its other brand chiefs.

Santucci’s departure is the latest in a string of defections from Gucci, and industry sources suggest there could be more as PPR brass assert a new corporate culture and turn up the pressure for a quick return on its investment. It paid 7.2 billion euros, or about $9 billion, for the world’s third-largest luxury group.

Santucci was said to already be feeling the heat for sales and profitability figures PPR deemed insufficient for a cash cow like Gucci, which compensates for losses at money-losing acquisitions such as Boucheron, YSL and Balenciaga, as reported.

Polet, who joined Gucci Group as ceo last July from Unilever’s frozen foods division, has yet to table his strategic plan for the luxury conglomerate. It is still expected in December.

But sources said that improving financial performance in all corners of the company is already a primary strategy. The emerging brands, which include Stella McCartney and Alexander McQueen, already have been told to find sponsorships, do joint ventures or sign licenses to bring them quickly into the black.

“They’re trying to erase what they see as the excesses of the Tom and Dom era,” one source said.

Although Santucci’s exit seemed sudden, he had been working at Gucci without a signed employment contract since late last year. According to sources, Santucci had initially delayed its renewal in the wake of Ford’s and De Sole’s planned exits, especially since he had once been considered a potential successor to De Sole.

But then Weinberg was said to have held up the process.

“Serge never decided — and he delayed and delayed on signing that contract,” one source said. “He eventually offered Santucci a new contract, but by that time, Santucci was furious about the delay and about the terms of the deal. The offer PPR was making Santucci was a silly one.”

Relations between Polet and Santucci were described as tense, owing to divergent views on Gucci strategy. Also, Polet had been regularly calling in Bain and Co. to help with strategy, something never done during De Sole’s reign. “Why on earth would you call in management consultants if you already have good managers?” one source asked.

A source said Santucci harbored some resentment for being passed over for the top job. He sought to have his widened responsibilities entrenched in his new contract — and his salary demands were described by one PPR insider as “crazy.”

A union source inside the Gucci plant in Scandicci, Italy, said Wednesday that employees were concerned about the news, especially in light of the recent departure of human resources director Renato Ricci, considered another bridge-builder between employees and upper management.

The source said the abrupt and unexpected nature of Santucci’s departure was particularly difficult for Gucci workers, who in the past felt as though they were kept in the loop on company developments. He added that Ricci and Santucci together created a good environment for employees.

Still another source said Santucci’s style could be off-putting. “He is the type of person who would drop a phrase in Latin or Greek when talking to a factory worker in Florence,” he said.

Sources in Italy said Santucci has been characterizing his departure to friends and colleagues as a dismissal. But it is believed he would have little legal recourse since he was working without a contract.

Meanwhile, sources indicate Polet has made largely a good impression on employees. One likened Polet to De Sole and added, “he’s charismatic and seems a nice guy.”