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www.the
genius
works.com © Peter Fisk 2008
 
Gucci
Less sex please, we’re Italian
 
Peter Fisk
 
The House of Gucci, better known as simply Gucci, was founded by Guccio Gucci in Florence in1906. Today, Gucci is one of the most prestigious, and recognised fashion brands in the world,generating over US$7 billion revenue worldwide in 2006 and ranked 46th most valuable brand byBusiness Week in the same year. Owned by the French company Pinault-Printemps-Redoute (PPR),it operates around 425 stores worldwide, responsible for 70% of its revenues.Guccio Gucci was the son of a northern Italian merchant. He started the House of Gucci as a small,family-owned leather saddlery shop. Guccio was an exceptional craftsman and began selling leatherbags to horsemen in the 1920s. As a young man, he quickly built a reputation for quality, hiring thebest craftsmen he could find to work in his atelier. In 1938, Gucci expanded and a boutique wasopened in Rome. Guccio was responsible for designing many of the company's most notableproducts. In 1947, Gucci introduced the bamboo handle handbag, which is still a company mainstay.During the 1950s, Gucci also developed the trademark striped webbing, which was derived from thesaddle girth, and the suede moccasin with a metal bit.In 1953, his son Aldo helped lead the company to a position of international prominence, opening thecompany’s first boutiques in London, Paris, and New York. He then targeted the Far East for furtherexpansion in the late 1960s, opening stores in Hong Kong, Tokyo, and Korea. At that time, thecompany also developed its famous GG logo (Guccio Gucci's initials), the Flora silk scarf (wornprominently by Hollywood actress Grace Kelly), and the Jackie O shoulder bag, made famous byJackie Kennedy.Gucci remained one of the premier luxury goods establishments in the world until the late 1970s,when a series of disastrous business decisions and family quarrels brought the company to the vergeof bankruptcy. "In the 1960s and 1970s," wrote Vanity Fair editor Graydon Carter, "Gucci had been atthe pinnacle of chic, thanks to icons such as Audrey Hepburn. But by the 1980s, Gucci had lost itsappeal, becoming a tacky airport brand."
 
 
www.the
genius
works.com © Peter Fisk 2008
 
A turnaround of the company devised in the late 1980s made Gucci one of the world's most influentialfashion houses and a highly profitable business operation. In October of 1995 Gucci went public andhad its first initial public offering. The firm was named "European Company of the Year 1998" by theEuropean Business Press Federation for its economic and financial performance, strategic vision aswell as management quality.In 1989, Maurizio Gucci managed to persuade Dawn Mello, who had revived New York's BergdorfGoodman to join as creative director, who subsequently hired a young, unknown Texan designernamed Tom Ford.However the early 1990s were another poor time for the business, and Maurizio eventuallyrecognized he was incapable of running the business, handing over to the then head of GucciAmerica, Domenico De Sole, who also replaced Mello with Ford, recognizing that the brand needed aradically new image, and investment. PPR took a 40% stake in the business, later rising to 68%.Tom Ford’s Gucci was an orgy of sex and eroticism, celebrity and glamour.With his permanent tan and designer stubble, ripped jeans and jackets, the Texan was larger thanlife. His women stepped out of stretch limousines with dark shades, high heels and half naked. Gucciwas accused of embracing “porno chic” which is probably justified when one of Ford’s advertisementsfeatured the Gucci “G” shaved into a female model’s pubic hair. He was charismatic and creative, inan “in your face” kind of way, but also responsible for getting Gucci back on track, much anticipated atevery fashion show, and back at the cutting edge of designer fashion.However Gucci was now part of a larger business, whose French owners didn’t see the future of thebrand in a man who they felt put his own ego before one of the most valuable luxury brands in theworld. De Sole and Ford were replaced eventually by the more down to earth Mark Lee as CEO, andFrida Giannni as head designer.Lee describes Ford’s vision as a low point for the Gucci brand, when it swapped its cosmopolitanhome on the glamorous streets of Rome for the dark and aggressive nightclubs of LA.Gianni meanwhile says that she is much more interested in the brain than the body, keen to get backto the Gucci glamour of the fifties, to its Italian roots, optimistic and a little eccentric, sensual ratherthan sexy, more Isabella Rossini than Paris Hilton.Business performance is improving too. Revenues exceeded $3 billion for the first time in 2006, withthe strongest growth in North America and Asia, and profits over $800 million. The online business isgrowing rapidly, as is its stores portfolio, particularly in China.More sense and sensuality is selling much better than sex. © Peter Fisk 2008. This article is extracted from Peter Fisk’s next book
Business Genius: a more inspired approach to business growth 
published by Wiley Capstone in May 2008.Peter Fisk is an inspirational author and speaker, consultant and entrepreneur. His best-selling book
Marketing Genius 
has been translated into 28 languages, and he was recently described by
Business Strategy Review 
as “one of the best new business thinkers”. His new book
Business Genius 
 describes the challenge of sustaining business growth through turbulent times.
 
He has worked internationally with market leaders including British Airways and Coca Cola, Marks &Spencer and Microsoft, Virgin and Vodafone. He was the transforming CEO of the Chartered Instituteof Marketing, led the global strategic marketing consulting team of PA Consulting Group, managingdirector of Brand Finance, and partner of strategic innovators The Foundation.He now leads The Genius Works, helping business leaders to see things differently – to develop andimplement more inspired strategies, innovation and marketing.
The Genius Lab 
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