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. Today Gucci is the group’s largest brand, generating over $9.7 billion in 2021 on a $17.64 billion group revenue. Thus representing over 55% of Kering’s Group revenues in 2021.

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.

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.

Read Also: What are the LVMH subsidiaries?, Bernard Arnault Empire: LVMH Group Business Model, How Does Tiffany Make Money?

Read Also: Successful Types of Business Models You Need to Know.

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Kering Group

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Kering Group follows a multi-brand business model strategy, where the central holding helps the brands and Houses part of its portfolio to leverage on economies of scale while creating synergies among them. At the same time, those brands are run independently. Kering is today a global luxury brand which made over €15 billion in 2017 based on this multi-brand strategy. Within Kering group there are brands like Gucci, Bottega Veneta, Saint Laurent, and Puma. The two primary operating segments based on luxury and sport & lifestyle.

LVMH Group

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LVMH is a global luxury empire with over €46 billion in revenues for 2018 spanning across several industries: wines and spirits, fashion and leather goods, perfumes and cosmetics, watched and jewelry, and selective retailing. It comprises brands like Louis Vuitton, Christian Dior Couture, Fendi, Loro Piana, and many others. 

Slow Fashion

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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

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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

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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

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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

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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.

Ultra Fast Fashion

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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.

Real-Time Retail

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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

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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.

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