kauguri's

guide to fashion

The Gucci Story - Part 3

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A turnaround of the company devised in the late 1980s made Gucci one of the world's most influential fashion houses and a highly profitable business operation. In October of 1995 Gucci decided to go public and had its first initial public offering on the AEX and NYSE for $22 per share. November of 1997 also proved to be a successful year as Gucci acquired a watch licensee, Severin-Montres, and renamed it Gucci Timepieces. Gucci watches have become some of the most beautiful and most sought after timepieces in the world and sell internationally. The Gucci brand is considered one of the most frequently mentioned brands. The firm was named "European Company of the Year 1998" by the European Business Press Federation for its economic and financial performance, strategic vision as well as management quality.

New Management

In 1989, Maurizio managed to persuade Dawn Mello, whose revival of New York's Bergdorf Goodman in the 1970s made her a star in the retail business, to join the newly formed Gucci Group as creative director. At the helm of Gucci America was Domenico De Sole, a former lawyer who helped oversee Maurizio’s takeover of the company and the purchase of the company’s remaining shares by Investcorp, a Bahrain-based holding company between 1987 and 1989. The last addition to the creative team, which already included designers from Geoffrey Beene and Calvin Klein, was a young designer named Tom Ford. Raised in Texas and New Mexico, he had been interested in fashion since his early teens but only decided to pursue a career as a designer after dropping out of Parsons School of Design in 1986 as an architecture major. Dawn Mello hired Ford in 1990 at the urging of his partner, writer and editor Richard Buckley.

In the early 1990s, Gucci underwent what is now recognized as the poorest time in the company's history. Maurizio riled distributors, Investcorp shareholders, and executives at Gucci America by drastically reining in on the sales of the Gucci Accessories Collection, which in the United States alone generated $110 million in revenue every year. The company’s new accessories failed to pick up the slack, and for the next three years the company experienced heavy losses and teetered on the edge of bankruptcy. Maurizio was a charming man who passionately loved his family's business, but after four years most of the company's senior managers agreed that he was incapable of running the company. His management had had an adverse effect on the desirability of the brand, product quality, and distribution control. He was forced to sell his shares in the company to Investcorp in August of 1993. Dawn Mello returned to her job at Bergdorf Goodman less than a year after Maurizio’s departure, and the position of creative director went to Tom Ford, then just 32 years old. Ford had worked for years under the uninspiring direction of Maurizio and Mellow and wanted to take the company’s image in a new direction. De Sole, who had been elevated to CEO, realized that if Gucci was to become a profitable company, it would require a new image, and so he agreed to pursue Ford’s vision.

Tom Ford

Ford had long been an avid follower of two of America’s top designers, Ralph Lauren and Calvin Klein. Klein, much like Ford, was a “superstar designer,” the exemplar of his own brand: stylish, suave, and modern. His scandalous advertisements made the brand synonymous with eternal youth and the mystery of adolescent sexuality. Lauren, as Ford described, was “the only designer to really create an entire world… you know exactly what his people look like, what their houses look like, what kind of cars they drive,” a mantra he would adopt at Gucci years later. But where Ralph Lauren embodied the WASP culture of New England, Ford created a lifestyle brand for the hedonistic, urban-dwelling fashionistas who emblemized the brand in years past.

Ford's 1995 ready-to-wear line for Gucci dazzled fashion critics. The collection was reminiscent of the Studio 54 jet-set clientele that created a buzz around the label in the 1970s, with its unbuttoned silk shirts and tight velvet hip-huggers. "It was hot! It was sex!" Joan Kaner, fashion director for Neiman Marcus, exclaimed. "The girls looked like they had just stepped off someone’s private jet. You just knew that wearing those clothes would make you look like you were living on the edge—doing it and having it all!"

While Ford’s 1995 ready-to-wear line was met with rave reviews by industry insiders, it was the celebrity following that would propel Gucci back to the top of the industry. In 1995, Madonna appeared at the MTV Video Music Awards to collect an award for “Take A Bow” in head-to-toe Gucci. Soon thereafter, Gwenyth Paltrow graced the red carpet in the season’s signature look, a red crushed velvet tuxedo with an unbuttoned blue dress shirt, and British actress Elizabeth Hurley donned that season’s patent leather spiked boots to a movie premiere. Celebrities, fashion models, and wealthy young patrons around the world were clamoring for pieces from the new collection. In the years that would follow, nearly every major celebrity in Hollywood came to Ford for formalwear on awards night, and celebrity sightings once again became commonplace in the company’s boutiques.

Gucci’s warm reception among the glitterati had an unintended side effect: the elevation of Tom Ford from designer to sex symbol. Practically overnight, Ford became one of the most celebrated new stars in entertainment. He graced the pages of entertainment and fashion magazines alongside advertisements that featured his company’s sexy new look. People Magazine called him one of the 50 most beautiful people of the year. The defining characteristic of Ford’s work was what came to be known as the “Gucci sex factor.” His spring 1996 collection, which was reminiscent of the flower child fashions of the early and mid-1970s, continued Ford’s signature trend of sky-high hemlines and plunging necklines. By his third collection, it became clear that the highly suggestive advertisements and scanty clothing were not passing fads at the generations-old fashion house, but rather the attribute that would set Gucci apart from its competitors.

Gucci Group became a publicly traded company in 1995, incorporated in the Netherlands, and listing on the New York and Amsterdam Stock Exchanges. It issued further shares in 1996.

----> Part 4 - Louis Vuitton attempts a takeover