who-owns-gucci

Who owns Gucci?

Gucci is owned by the french holding Kering, which completed its buyout of Gucci in an $8.8 billion deal in 2004. Artémis is the investment company of the Pinault family. Founded in 1992 by François Pinault, Artémis is the leading shareholder in Kering, which owns Gucci. The Kering Group generated over €20 billion in revenue in 2022, and Gucci was the leading brand, with revenue of €10.5 billion.

kering-brands
Kering is a luxury goods multinational founded in France by François Pinault in 1963. The company, which initially specialized in timber trading, grew via acquisitions and was listed on the Paris Stock Exchange in 1988. Two years later, Kering merged with a French conglomerate interested in furniture, department stores, and bookstores.

Gucci origin story

Gucci is a luxury fashion house based in Florence, Italy, which sells products such as footwear, perfumes, makeup, ready-to-wear, and home décor. 

Gucci was founded in 1921 by Guccio Gucci, with their son Aldo Gucci responsible for making the family-owned company a brand recognized worldwide.

The first American store was opened in New York City in 1953, with showrooms then opened in London, Paris, and Florida over the next decade.

As of December 2021, Gucci operated 501 stores worldwide with estimated global revenue totaling €9.73 billion.

The company also celebrated 100 years in business in 2021 with new collections based on its most celebrated designs.

The Luxury Wars!

On March 1995, as Maurizio Gucci crossed the road to reach his office in the center of Milan, a man with a tight grip on his gunshot him dead!

That was the epitome of the Gucci wars.

A decade of family feuds had turned Gucci from one of the most iconic brands in the world to one of the most talked about, not for its fashion products, but for its family fights.

Eventually, the story got even crazier as investigators discovered that his former wife, Patrizia Reggiani, had commissioned the homicide.

Yet, in parallel to it, as the Gucci family lost control of its empire in the mid-90s, another business war was going on!

In the late 1990s, the luxury industry consolidated in a set of wars that would eventually converge into a luxury empire that, in 2022, churned the wealthiest man on earth: LVMH, led by Bernard Arnault.

It all started with the attempt to take over Gucci by Prada’s CEO Patrizio Bertelli, which, in 1998-9, had acquired a good chunk of Gucci, apparently as an attempt to seal a strategic partnership with the company.

In previous years, Gucci had gone through internal battles to control the company.

First, the litigious Gucci family had faced many legal battles for the company’s takeover.

Eventually, this led to the ousting of most of the company and the successful attempt of Maurizio Gucci (the son of Rodolfo, one of the second generations of the Gucci family).

Indeed, for some context, Gucci was founded in the 1920s by Guccio Gucci, which successfully transformed the company into one of the more renowned Italian fashion boutiques.

Yet, Guccio’s sons, Aldo, Rodolfo, and Vasco, primarily transformed the business.

Aldo led the international expansion of Gucci, which transformed it into one of the most renowned fashion houses of the 1970s.

In contrast, Rodolfo and Vasco led the creative and industrial side back in Italy.

The second generation of Gucci was highly successful in building Gucci into one of the most successful fashion brands in the world.

Gucci was the first Italian company to successfully expand in the US, to become a brand comparable to other French fashion brands, and it managed to IPO back in 1995.

Yet, Gucci also set the stage for a family feud, made of legal battles, that would make it into the most talked about until the 1990s.

Finally, after internal wars that lasted for years, Maurizio Gucci, son of Rodolfo, managed to take over control of the company, thanks to the partnership with Investcorp. This investment fund had put its eyes on Gucci.

As Maurizio Gucci took control of Gucci, he tried to rebuild the brand by re-organizing it around the core product lines.

Yet, after 2-3 years of unsuccessful attempts, Investcorp played its cards and ousted Maurizio Gucci.

As the last Gucci was ousted from the company’s management and ownership, the company was led by Domenico De Sole, an Italian-born, US-adopted lawyer, who had grown into Gucci, from Maurizio Gucci’s father’s loyal lawyer to the company’s CEO.

At the same time, Gucci reorganized its management.

Tom Ford, a young designer, finally became the head of the company’s creative side (Tom Ford would sell his own brand to Estée Lauder, in 2022, for $2.8 billion!).

The duo De Sole-Ford (they are still partners today, and De Sole also helped sell Ford’s company to Estée Lauder in 2022) would go on to create one of the most successful business turnarounds of the last decades.

Gucci went from losing a ton of money in the mid-90s to a highly profitable company at the turn of the century.

By the late 1990s, thus, Gucci had become an interesting target for other brands, primarily Prada, who started the bidding wars.

Indeed, as Bertelli, Prada’s CEO (the guy that had married Miuccia Prada and had turned a creative company into a fashion empire), had bought a substantial chunk of shares from Gucci, he tried to build a strategic partnership with the company.

Yet, now run by Domenico De Sole and Tom Ford, Gucci didn’t want to deal with Bertelli or lead a merger between the two companies.

This opened the way for another company that would try all it could to conquer Gucci: LVMH.

At the time, LVHM had already become a luxury empire thanks to the incredible business acumen of Bernard Arnault.

Arnault started his career by channeling the resources from the family real estate business toward iconic French brands.

By the late 1990s, LVMH had become the first multi-brand fashion house.

In 1998-9, the luxury industry lived a strange moment. As we saw back then, Patrizio Bertelli (Prada’s CEO) seemed to have foreseen the future.

After he had acquired a good chunk of Gucci shares, which resembled an unusual move, he tried a takeover, which would be almost impossible for the time.

Indeed, while Gucci was a rival of Prada, Prada was smaller than Gucci.

While Bertelli’s reasoning might have also been driven by the fear of Gucci entering into agreements with some of Prada’s artisans in the Scandicci region in Italy, Bertelli backed down when Bernard Arnault came in.

As we saw, the paradox is that Prada was smaller than Gucci at the time and didn’t have the financial resources to take over the company.

So eventually, Prada sold its stake to LVMH for an incredible financial gain.

While Arnauld initially claimed his takeover of Google was a friendly one, it came out almost immediately that he was only trying to get more and more control of the company to finally make Gucci one of the brands under the control of LVMH.

Indeed, Arnauld’s tactics were well-known at that point.

He managed to gain control of many valuable fashion brands and reunite the brand’s LV and MH under the same umbrella by playing the owners of those two brands against each other while he took control of their group!

Yet, under Domenico De Sole and Tom Ford, Gucci didn’t like the idea of being taken over by LVMH to become one of the brands under Arnauld’s control!

Thus, the war ensued.

In an incredible deal of the last moment, Gucci found a white knight, into another French billionaire, François-Henri Pinault.

Pinault understood the time window to consolidate in the fashion industry was right.

He convinced De Sole and Tom Ford to close a deal with him by making Gucci the central business unit in charge of developing a multi-brand strategy for PPR (which would eventually become Kering)!

LVMH, which had amassed a substantial stake in Gucci, was diluted as Gucci issued stocks in favor of Pinault, thus making Arnauld slowly back up from the deal.

That was the beginning of the fight between two groups that would eventually dominate the whole luxury fashion industry: LVMH (controlling brands like Christian Dior, Fendi, Givenchy, Marc Jacobs, Stella McCartney, Loewe, Loro Piana, Bulgari, and Tiffany & Co) and Kering (controlling brands like Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen)!

Gucci ownership structure

When Guccio Gucci passed away in 1953, three of his five sons received shares in the company – Aldo, Rodolfo, and Vasco.

When Vasco passed away in 1974 and Rodolfo in 1983, Gucci was owned by surviving brother Aldo and Rodolfo’s son Maurizio. 

In the 1980s, Maurizio and Aldo Gucci became involved in protracted battles over who would assume majority ownership of the company.

Maurizio ultimately took control of Gucci after Rodolfo was sentenced to a year in prison for tax evasion.

In 1988 with the company in financial difficulty, he sold approximately 48% of Gucci to Bahrain-based investment firm and Tiffany owner Investcorp.

The rest of Gucci was sold to Investcorp in a 1993 deal with around $200 million.

Under new leadership in the late 1990s, Gucci’s reversal in fortunes saw Prada take a 9.5% stake.

Bernard Arnault, chief of luxury conglomerate LVMH, also accumulated a sizeable holding of 34% and then acquired Prada’s stake before an unsuccessful takeover bid.

To escape LVMH’s control, Gucci reached out to French financier François Pinault and his multinational corporation Pinault Printemps Redoute – now known as Kering.

The corporation purchased a 44% stake in Gucci in 1999, diluting LVMH’s controlling interest in the process.

The deal resulted in a long and expensive court battle between Kering and LVMH as both companies tried to wrestle control of Gucci.

Kering would prove to be the victors of this battle and completed their buyout of Gucci in an $8.8 billion deal in 2004.

Key takeaways:

  • Gucci is a luxury fashion house based in Florence, Italy, which sells products such as footwear, perfumes, makeup, ready-to-wear, and home décor. Gucci was founded in 1921 by Guccio Gucci, with their son Aldo Gucci responsible for making the family-owned company a brand recognized worldwide.
  • Gucci was family-owned until 1988, when financial difficulties caused the company to be sold to Bahrain-based investment firm Investcorp. Gucci was then progressively sold off to LVMH, who initiated an unsuccessful takeover bid.
  • French multinational Pinault Printemps Redoute took a controlling stake in Gucci to arrest control from LVMH, which resulted in a long court battle that it would ultimately win. The multinational, now known as Kering, completed its purchase of Gucci in 2004.

Related Visual Stories

Kering Revenue

kering-revenue-breakdown
In 2022, Kering generated €20.35 billion in revenue, of which €10.49 billion from Gucci (50.6%), €3.3 billion from Yves Saint Laurent (15.9%), €1.74 billion from Bottega Veneta (8.39%), and €3.87 billion from the other houses.

Kering Financials

kering-financials
Kering generated €20.35 billion in revenue in 2022 and €3.6 billion in profits, €17.64 in revenue in 2021, and €3.17 billion in profits.

Gucci Revenue

gucci-revenue
Gucci generated €10.49 billion in revenue in 2022, compared to €9.73 billion in 2021 and €7.44 billion in 2020.

Yves Saint Laurent Revenue

yves-saint-laurent-revenue
Yves Saint Laurent generated €3.3 billion in revenue in 2022, compared to €2 billion in 2021 and €1.74 billion in 2020.

Bottega Veneta Revenue

bottega-veneta-revenue
Bottega Veneta generated €1.74 billion in revenue in 2022, compared to €1.5 billion in 2021 and €1.21 billion in 2020.

Bernard Arnault’s Net Worth

bernard-arnault-net-worth
Bernard Arnault’s wealth is around $203 billion. Indeed Arnault is the CEO and chairman of the luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton, a massive luxury group that generated over €79 billion in revenue ($83 billion) in 2022, spanning across wines, fashion, cosmetics, and retail. The Arnault family group owns 48.18% of the capital for LVMH with 63.9% voting power, making Bernard Arnault the principal owner and decision-maker. His stake is worth over $203 billion.

Slow Fashion

slow-fashion
Slow fashion is a movement in contraposition with fast fashion. Where in fast fashion, it’s all about speed from design to manufacturing and distribution, in slow fashion, quality and sustainability of the supply chain are the key elements.

Patagonia Business Model

patagonia-business-model
Patagonia is an American clothing retailer founded by climbing enthusiast Yvon Chouinard in 1973 who saw initial success by selling reusable climbing pitons and Scottish rugby shirts. Over time Patagonia also became a fashionable brand also for its focus on slow fashion. Indeed, the company sells high-priced clothing items built to last which it will repair for free.

Patagonia Organizational Structure

patagonia-organizational-structure
Patagonia has a particular organizational structure, where its founder, Chouinard, disposed of the company’s ownership in the hands of two non-profits. The Patagonia Purpose Trust, holding 100% of the voting stocks, is in charge of defining the company’s strategic direction. And the Holdfast Collective, a non-profit, holds 100% of non-voting stocks, aiming to re-invest the brand’s dividends into environmental causes.

Fast Fashion

fast-fashion
Fash fashion has been a phenomenon that became popular in the late 1990s and early 2000s, as players like Zara and H&M took over the fashion industry by leveraging on shorter and shorter design-manufacturing-distribution cycles. Reducing these cycles from months to a few weeks. With just-in-time logistics and flagship stores in iconic places in the largest cities in the world, these brands offered cheap, fashionable clothes and a wide variety of designs.

Inditex Empire

inditex-fast-fashion-empire
With over €27 billion in sales in 2021, the Spanish Fast Fashion Empire, Inditex, which comprises eight sister brands, has grown thanks to a strategy of expanding its flagship stores in exclusive locations around the globe. Its largest brand, Zara, contributed over 70% of the group’s revenue. The country that contributed the most to the fast fashion Empire sales was Spain, with over 15% of its revenues.

Prada Business Model

prada-business-model
The family-owned Italian luxury brand – Prada – generated over four billion euros in revenues for 2022. Among Prada brands, Prada made more than 87% of the company’s revenues, followed by Miu Miu and Church. Prada also owns Marchesi 1824 (a luxury bakery) and Car Shoe (a shoe company) made about half a percent of the total revenues.

Ultra Fast Fashion

ultra-fast-fashion
The Ultra Fashion business model is an evolution of fast fashion with a strong online twist. Indeed, where the fast-fashion retailer invests massively in logistics and warehousing, its costs are still skewed toward operating physical retail stores. While the ultra-fast fashion retailer mainly moves its operations online, thus focusing its cost centers on logistics, warehousing, and a mobile-based digital presence.

ASOS Business Model

asos-business-model
ASOS is a British online fashion retailer founded in 2000 by Nick Robertson, Andrew Regan, Quentin Griffiths, and Deborah Thorpe. As an online fashion retailer, ASOS makes money by purchasing clothes from wholesalers and then selling them for a profit. This includes the sale of private label or own-brand products. ASOS further expanded on the fast fashion business model to create an ultra-fast fashion model driven by short sales cycles and online mobile e-commerce as the main drivers.

Real-Time Retail

real-time-retail
Real-time retail involves the instantaneous collection, analysis, and distribution of data to give consumers an integrated and personalized shopping experience. This represents a strong new trend, as a further evolution of fast fashion first (who turned the design into manufacturing in a few weeks), ultra-fast fashion later (which further shortened the cycle of design-manufacturing). Real-time retail turns fashion trends into clothes collections in a few days or a maximum of one week.

SHEIN Business Model

shein-business-model
SHEIN is an international B2C fast fashion eCommerce platform founded in 2008 by Chris Xu. The company improved the ultra-fast fashion model by leveraging real-time retail, quickly turning fashion trends in clothes collections through its strong digital presence and successful branding campaigns.

Read Next: Zara Business Model, Inditex, Fast Fashion Business Model, Ultra Fast Fashion Business Model, SHEIN Business Model.

Main Free Guides:

About The Author

Scroll to Top
FourWeekMBA