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Abstract

Interviewed by the L’Expansion French newspaper (in September 2004) on the failure of LVMH’s takeover bid for Gucci in 1999, Bernard Arnault, CEO (Chief Executive Officer) of LVMH, remarked: ‘looking back, it’s clear that we were very fortunate to fail in that venture’. Joking aside, six years after Gucci was taken over by François-Henri Pinault and PPR (Pinault – Printemps – La Redoute), many luxury goods industry experts now question the appropriateness of this investment. In 1999, François-Henri Pinault’s plan was to take over an Italian family leather goods business, founded in 1923 in Florence by Guccio Gucci, and to transform it into a giant of the world luxury goods industry. Gucci is now at the crossroads, with prestigious brands, strong sales growth and world development, but also with disappointing financial results, risky choices on some brands, and uncertainty regarding creativity after the departure of Tom Ford. This case study proposes to analyse the fast track growth of a luxury goods generalist, to examine its advantages and deficiencies, and to ask a certain number of questions on the relevance of the growth strategy that was carried out.
Location:
Industry:
Size:
Large
Other setting(s):
2005

About

Abstract

Interviewed by the L’Expansion French newspaper (in September 2004) on the failure of LVMH’s takeover bid for Gucci in 1999, Bernard Arnault, CEO (Chief Executive Officer) of LVMH, remarked: ‘looking back, it’s clear that we were very fortunate to fail in that venture’. Joking aside, six years after Gucci was taken over by François-Henri Pinault and PPR (Pinault – Printemps – La Redoute), many luxury goods industry experts now question the appropriateness of this investment. In 1999, François-Henri Pinault’s plan was to take over an Italian family leather goods business, founded in 1923 in Florence by Guccio Gucci, and to transform it into a giant of the world luxury goods industry. Gucci is now at the crossroads, with prestigious brands, strong sales growth and world development, but also with disappointing financial results, risky choices on some brands, and uncertainty regarding creativity after the departure of Tom Ford. This case study proposes to analyse the fast track growth of a luxury goods generalist, to examine its advantages and deficiencies, and to ask a certain number of questions on the relevance of the growth strategy that was carried out.

Settings

Location:
Industry:
Size:
Large
Other setting(s):
2005

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