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Gucci's golden boys quit
AMSTERDAM, Netherlands (Reuters) -- Gucci Chief Executive Domenico De Sole and designer Tom Ford, who built an almost bankrupt family firm into the world's number three luxury goods company, will leave next year after failing to agree new contracts with owner Pinault-Printemps-Redoute (PPR). PPR shares slumped on Tuesday after it said Gucci's managerial dream team would leave on April 30, 2004, about the time that French retailer has promised to buy out minority Gucci shareholders. PPR's shares were down 5.3 percent at 83.60 euros by 0847 GMT. Gucci opened 2.5 percent lower then climbed back to 73.80 euros, down 1.9 percent. De Sole and Ford had previously said they would only stay beyond 2004 if PPR gave them full autonomy at the house, famed as much for its super-sexy clothes and racy advertising campaigns as for its top-selling bags and shoes. "Intensive efforts by the parties (to renegotiate contracts) did not result in an agreement satisfactory to all concerned,'' Gucci and PPR said in a statement. PPR owns a little less than 70 percent of Gucci and has promised to buy out other shareholders for $85.52 per share from early 2004 at a total cost of about $2.5 billion. PPR originally bought a strategic stake in Gucci in 1999, working closely with De Sole in a "white knight'' move to save the Florentine fashion house from hostile takeover bids from the world's leading luxury conglomerate LVMH. On Tuesday, PPR's Chairman Serge Weinberg said managers and designers at the Gucci group would have "a large degree of autonomy, which we consider crucial to ensure the identity and creative expression of each brand.'' Under De Sole and Ford, Gucci embraced the 1990s trend for building an empire of luxury labels. Its brands now range from Yves Saint Laurent, designed to critical acclaim by Ford, to leather firm Bottega Veneta and British bad-boy designer Alexander McQueen. "In the long term, their departure is OK because if there were already problems, there would always have been arguments. In the short term it is not positive news but we have to see who they appoint,'' said a sector analyst who asked not to be named. Gucci's supervisory board has set up a committee headed by Weinberg to choose Ford and De Sole's successors. PPR and Gucci are due to hold a conference call at 1430 GMT. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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