G U C C I

Historically, fashion was viewed like movies. We made it a business.

Domenico De sole – CEO of Gucci Group

HISTORY

1923: Florence, leather goods

1930s: Mussolini, new material,

canvas, producing small leather goods,

wallets and belts

1953-1973: more shops in USA ,Europe,

Japan

1970s: an internal crisis wracked the

firm 1980s: block venture and

lawsuits flew back and forth

HISTORY

WHAT DID DE SOLE DO?

Fake Gucci bags

900 employees

600 points of sale

Too high prices

Disorganized production and nightmare delivery

No clarity to the direction of the company

No cost controls

No liquidity

Conservative women

BEFORE DE SOLE AFTER DE SOLE

About 15,000 products

He fired 150 employees and hired new manager

194 points of sale

Lowering prices on average by 30%

Reorganization of production and distribution

Quick decisions with discipline and focus

Cost control

High liquidity

Modern, urban woman

Quality

Price

COMPETITIVE

POSITIONING

Industry Rivalry:

(high)

Chanel, Hermés,Louis Vitton,Prada

Substitutes Competition:

(high)

Luxury but not necessary

Suppliers

(low)

They rely on different suppliers

Threat of Entry:

(high)

Various of brand , different trend every season

Buyers :

(high)

Customers are easily switch their choices

It depends on the relevance of distributors

PORTER’S

FORCES

Complementarities:

(low)Entertainment

2. WHICH CRITICAL MOVES ALLOWED DE SOLE TO

REPOSITION GUCCI?

OLD TARGET

NEW TARGET

Highly classic conception of women’s role in the society40-50 y.oUpper classFamily ladyMulti-brands loyalNot price conscious

Upper class30-50 y.oSingles working womenReaders of fashion magazineChange every season

IMAGE MAKEOVER

DE SOLE - FORD

PARTNERSHIP

The two men ran Gucci together, De Sole in managerial terms and Ford in

creative ones. Trust and mutual respect were key factors in

the Gucci turnaround.

2. WHICH CRITICAL MOVES ALLOWED DE SOLE

TO REPOSITION GUCCI?

Distribution

DOS (from 65 to 126)DOS

renovations,“clean, modern look”

Closure of Duty free store

As opposed to previous franchising

and license agreement strategy

PRICINGLowered priced by 30% to be on the same level as Prada and Vuitton, to target fashionable young women

MANUFACTURING

• Keep only best manufacturers and cut off the rest

• Provide selected suppliers with technical and financial support

• Outsource 95% of leather goods, keep

• only exotic skins in-house

• System based on 3 pillars: Skilled artisans, advanced technology and efficient logistics

ADVERTISING

• Doubled from 1993 to 1994

• expected to spend 250 million in 2000

• “Create an arresting image of the world you want to be a part of”

• Tom Ford’s star status

IMPROVED COMMUNICATION WITHIN THE COMPANYManage Gucci as a coherent whole. The company used to operate on its own and no informationwas shared.

3. WHAT DO YOU THINK ABOUT THE ACQUISITION

OF YSL AND SERGIO ROSSI?

“If you really are an exclusive brand, you can’t grow beyond a certain point. Nobody knows where that point is, but there is a limit to the number of handbags you can sell for $1000. That’s the bottom line.”

(De Sole)

1999 2000 2001 2002

21% 22.5% 22.5% 24.3%

OPERATING MARGIN

4. HOW IS THE CURRENT COMPETITIVE

POSITION OF GUCCI GROUP?

4,2 billion (Business week)

41° “The Global 100 Brands” (interbrand)

278 directly operated stores

$ 12,1 billion USD with a sales of $ 4,7

billion USD

38° most valuable brand ( Forbes)

2008 2009 2013

The Biggest-Selling Italian Brand !

1999 2003 2008 2012

1.2 billion revenues 3.1 billion revenues 4.2 billion revenues 4.7 billion revenues

INCREASE OF REVENUES

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000

5000000

1998 2003 2008 2012

Revenues

TRADITIONAL INNOVATIVE

LUXURY

AFFORDABILITY

CURRENT

COMPETITIVE

POSITIONING

Thank you for your

attention!Xueyang Chen Giuseppe

Origo

Stefania Stefanizzi

Marika Torcitto

Maria Paula Varela