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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Please note:
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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Excerpts
Background Note
In 1923, Guccio Gucci opened a small shop in Florence to sell leather goods. Initially, Gucci sold luggage imported from Germany and offered repair services on the side. As business picked up, Guccio smelt an opportunity in the high end Florentine market for leather goods...
The PPR Group
François Pinault of the Pinault group started PPR in the early 1960s as a timber trading firm. Over the years, PPR had expanded by
'combining acquisitions with organic growth' and become a leader in specialized distribution in Europe...
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The Gucci group
The world's number three luxury goods company, Gucci designed, manufactured and distributed top-quality products including ready-to-wear apparel, handbags, luggage, leather goods, shoes, time pieces, jewelry, ties and scarves, eyewear, fragrances, cosmetics and skin care products...
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Rescuing the Brand
Once back in the saddle, Maurizio focused on rescuing the Gucci brand. An indiscriminate licensing spree had resulted in some 22,000 products, including tennis shoes, playing cards, and cigarette holders, bearing the Gucci name by the late 1980s...
Restructuring
Between 1991 and 1993, Gucci's total losses amounted to $102 million. Strapped for cash by the fall of 1993, Gucci was unable to finance new collections and advertising or even to pay suppliers and employees. Investcorp stood willing to rescue Gucci, but only if Maurizio stepped down... |
Excerpts Contd...>>
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