Word: gucci
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Dates: during 2000-2009
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...more than $6 billion. In the process, he has turned an industry that once consisted of hundreds of small, family-run companies into one dominated by a few luxury conglomerates, of which LVMH is pre-eminent. No other fashion brand is big enough to bid against him. Except one: Gucci...
Ironically, Arnault may have inadvertently midwifed the creation of his chief competitor. When Arnault launched a takeover of Gucci last year, quietly acquiring more than 20% of its outstanding shares--which he still holds--and then making an $8.7 billion bid for the whole firm, Gucci struck back by emulating the very business that was trying to acquire it. Gucci CEO Domenico De Sole and creative director Tom Ford started purchasing premium fashion brands in a bid to become a luxury superpower to rival LVMH...
...worked. Gucci is arguably a hotter brand than any in the LVMH stable. And Gucci is seeking to bestow its panache on shoemaker Sergio Rossi and fallen couture house Yves Saint Laurent, in a series of deals valued at more than $1 billion. "We are going to apply our own business model to YSL," De Sole promises, "going from a licensed-type situation to a controlled situation." Last week YSL announced it would be cutting its licensing agreements from 160 to about 50 to protect the value of its brand. It doesn't hurt that Ford, arguably the premier designer...
...Both Gucci and LVMH have been in fashion with investors, in part because Asia's recovery is viewed as a boon for sellers of swank. Gucci's stock, at $84.81, is off 33% from its 52-week high but still well above the $60 it was trading at a year ago, while LVMH, which trades in Paris, is up to $411 a share after reporting $8.4 billion in 1999 revenue, a 23% jump from last year...
...Kiehl's, a 149-year-old posh beauty brand that was acquired last week by French global giant L'Oreal. In February, Klein, noting the sums Arnault has been paying and the increasingly treacherous fashion market, also put his company up for sale. Potential suitors--LVMH and Gucci among them--have shied away from Klein's privately held company because its licensing agreements would deny a buyer dominant control of its product lines...