Gucci in 2004


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Case Details:

Case Code : BSTA010
Case Length : 12 Pages
Period : 1990 - 2005
Pub Date : 2005
Teaching Note :Not Available
Organization : Gucci; YSL (Yves Saint Laurent)
Industry : Luxury Goods
Countries : Europe and USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction

When Robert Polet (Polet), a former head of Unilever's ice cream and frozen foods business and a newcomer to the fashion and luxury goods industry, became CEO of the $1.9 billion luxury goods firm Gucci in April 2004, it raised a few eyebrows. Polet had been given the charge around the time French retailer Pinault Printemps Redoute (PPR) had increased its stake in Gucci to 99.39%.

Polet faced three big challenges. First, he needed to carve out a role for himself between the two powerful brand managers of the Gucci group – Mark Lee of Yves Saint Laurent (YSL) and Santucci of Gucci on the one side, and Serge Weinberg, the increasingly 'interventionist' chief executive of PPR, on the other.

Second, PPR was widely believed to have overpaid when it took control of Gucci for a total of €7.2bn. The high premium put Polet under pressure for delivering quick results. Last but not the least, Polet needed to prove that his consumer goods marketing expertise was transferable to the world of fashion.

There were other concerns as well. Gucci was losing talent at an alarming rate. Since PPR took control of Gucci, the luxury brands group had seen a string of high-profile departures, the most recent being Giacomo Santucci (Santucci), chief executive of the Gucci brand. Earlier PPR had fallen out with Domenico De Sole (De Sole), Gucci group's chief executive, and Tom Ford (Ford), creative director, the two people who were widely credited with transforming the brand. Ten top directors had put in their papers shortly after...

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