Gucci's troubles began in the 1970s as family members disagreed over strategy and wrestled for management control. A bitter infighting ensued between Aldo and Rodolfo Gucci, the founder's surviving sons, and the younger generation. In 1980, after twice being fired by his relatives, Aldo's son Paolo tried to launch a series of products under his own name.
Polet has three big challenges in front of him. First, he needs to make his presence felt in between the two powerful brand managers of the Gucci Group - Mark Lee of Yves Saint Laurent (YSL) and Santucci of Gucci on the one side, and Serge Weinberg, the increasingly "interventionist" chief executive of PPR, on the other. Second, PPR is widely believed to have overpaid when it took control of Gucci for a total of 7.2 bn. In 1923, Guccio Gucci (Guccio) 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. He soon set up a workshop where he designed and manufactured leather goods. The end of the First World War saw a tourist boom in Italy. Gucci prospered, with both local people and tourists flocking to his stores in the 1920s. Despite the sanctions (on importing leather) imposed by Mussolini in the 1930s, Gucci was able to hold his own. Gucci's troubles began in the 1970s as family members disagreed over strategies and wrestled for management control. A bitter infighting ensued between Aldo and Rodolfo Gucci, the founder's surviving sons. In 1980, after twice being fired by his relatives, Aldo's son Paulo tried to launch a series of products under his own name. Gucci moved to block his venture and lawsuits filed. In his efforts to force the rest of the family to back down, Paulo even revealed instances of tax evasion done by the firm. |
