Gucci's Profit Deadline

[Spacemiu]

GUCCI'S PROFIT DEADLINE

Alexander McQueen, Stella McCartney and Balenciaga must turn a profit within three years, Robert Polet said yesterday, though he failed to elaborate on what would happen if they didn't. The 49-year-old ex-CEO of the frozen foods division of Unilever, who took over as head of Gucci Group after Domenico de Sole left in April, criticised his predecessor's "one size fits all" approach to the acquired brands which saw them all opening stores with heavy investment before they showed any sign of making a profit, and said that Gucci would continue to invest in them for just three years. Polet also said that he intended to double Gucci's revenue, which was £1.05 billion in 2003, over the next seven years. "I am very confident that we can do this with Gucci's current positioning at the high end of luxury distribution," he said, adding that de Sole and Tom Ford's management team had taken its eye off the ball while carrying out the multibrand strategy that began in 1999. City analysts appeared to believe in Polet's plans, meanwhile. "Let's see the numbers," said Philip Mitchell, vice president at JP Morgan. "If they can get Gucci up 10 per cent over the next three years, then we will believe them." (December 15 2004, AM)

vogue UK

 

[maarit]

ex-CEO of the frozen foods division of Unilever

this always cracks me up

doubling Gucci's revenue? That's a lot but doable - they brand everything! I just wish the revenue (and sales) wouldn't rise at all

 

[tiffany]

I wonder if they will get Gucci's profit up by 10% over the next 3 yrs

 

[mikeijames]

the pendulum swings: they'll just sell a bunch of licenses....tom and dom spent all that money re-acquiring the gucci name and we'll just see all that work undone. expect those ugly blue gucci bags from the eighties.

 

[stylegurrl]

People may doubt Mr. Polet because of his background, but I think he has more sense than Tom and Dom ever had. If they hadn't been partying and drinking so much vodka, perhaps Gucci group would not have ended up saddled with so many unprofitable brands.

criticised his predecessor's "one size fits all" approach to the acquired brands which saw them all opening stores with heavy investment before they showed any sign of making a profit,

 

[Meg]

I think it is wise to analyze each brand individually and not just take the "one size fits all" approach but at the same time, I'm not sure 3 years is really enough time. All brands go through their high's and low's and while I am not familiar with balenciaga or alexander mcqueen's finances, I wuold hate to see either of them lose financial backing because they weren't strong for three years. And stella, though most dislike her, I've always had a softspot for her and don't want to see her lose her backers either. so we'll see.

 

[lady grey]

nothing but flowers

ive seen the latest ad campaign, the FLORA shoes & bag. while pretty its a real change from the 'dangerous sex' that tom made his gucci trademark.
i dont know about you but the sexual content and image that tom gave to gucci since late 90s was what made it among hottest brands.
the FLORA campaign is pretty but it seems also a safer, mass-market take on the previous sex that made me a gucci girl and tom-fan.

im not going to buy any gucci flowers i like my sexy night looks from late 90s to tom's last. I bought one pair of black horsebit loafers this fall but maybe 1 more pair in brown with the gold bit but after that Im swearing off gucci.

 

[versace]

see lady grey.. "sex sells"... so yeh

also.. its not just versace suffering from financial difficulty now is it??

 

[TheSweetest]

Is Gucci suffering? I didn't think they were suffering, but that the company would no longer support designers who weren't bringing in any cash.

 

[Spacemiu]

Is Gucci suffering? I didn't think they were suffering, but that the company would no longer support designers who weren't bringing in any cash.

I certinly don't think gucci is sufering, almost 2 billions is not suffering, I think the main problem is the other brands are not making huge profits.

 

[mikeijames]

I'm not sure 3 years is really enough time.

all of these emerging brands and the designers that head them have the ability to create highly covetable must have accessories and to launch best selling fragrance and beauty products. i don't think it will even take three years for all of them to get that. i mean mcqueen has been designing a mean shoe for a while now, i can only imagine what he could do with a bag. and stella should break into beauty that's not tested on animals and embodies her rock chick vibe.

 

[Alura]

vogue UK

With the s/s 2005 line of accessories I highly doubt if they will have a good start, the stuff looks uninspiring if you ask me.