Word: gucci
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Dates: during 2000-2009
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...realities have intervened. In February, Andrew Grossman, the man Armani hired 10 months earlier to oversee U.S. operations, was asked to resign. Industry insiders say Grossman's middle-market thinking clashed with Armani's. In March, Matthias Vriens, the creative director Armani hired last July, took a job at Gucci. And then in April, Armani's managing director and key deputy, Giuseppe Brusone, made it known he would be leaving after 15 years with the company. Suddenly the question appeared to be, How will Giorgio get things done...
Arnault hates to admit it, but he still desperately wants to make Gucci the jewel in the LVMH crown. The leather-goods maker is exactly the type of company Arnault knows how to maximize: a hot name with tightly held licensing and underexploited accessories markets. During the '80s Gucci became an overextended brand synonymous with suburban housewives. Starting in 1994, Gucci's De Sole and Ford began cutting back on licensing while focusing on building up the core fashion and leather-goods businesses. Ford persuaded celebrities like Tom Hanks and Madonna to don Gucci suits, and in just four years...
Both men take great pride in their remaking of the company and were horrified when it looked like Arnault--of whom Ford has said, "We could teach [him] a few things about this business"--would capture Gucci. To fend off the raider, the partners brought in self-made French billionaire Francois Pinault, the owner of Christie's auction house and part owner of Converse shoes, who used a controversial clause in Gucci's bylaws to purchase a 42% stake in the firm for $2.9 billion. Arnault insists Gucci's white-knight strategy was illegal, and the battle for the company...
With that battle raging, Arnault and De Sole clashed last November in a bidding war for Fendi, the maker of last year's to-die-for handbag, the baguette. Gucci's interest in the company probably forced Arnault to pay $200 million more than he would have otherwise before bagging Fendi for $950 million, a steep price for a firm whose net income last year was $20 million. De Sole insists Arnault overpaid for the company. Arnault, of course, vows to work his magic on Fendi. "It's a hot product with limited exposure," he says. "Perfect for what...
...make it work at the high end," he vows. Just now there are more brands to buy, more couture houses to take over and more designers to hire. And don't forget, Arnault will remind you, he still has some unfinished business with a little company called Gucci...