To what extent did Tom Ford and his marketing technique imposed at Gucci affect
the turnaround of the company?
Subject: Business and Management
Alexia Kalfopoulos
Candidate Number: 002905-002
Word Count: 3,941
1 Abstract
This essay reviews the extent of the marketing techniques employed by American fashion
designer Tom Ford at the House of Gucci and the causes of the turnaround in the
company’s then present and future.
This Essay reviews:
- the brief history and downfall of Gucci and the background of Tom Ford
- the change in product, price, and advertising pre- and post-Tom Ford
- the ideas behind Tom Ford’s vision
- the financial situation of Gucci pre- and post-Tom Ford
This Essay argues that during a time when the House of Gucci was nearing bankruptcy,
the ideas that new designer Tom Ford brought with him were vital and pivotal to the
survival of Gucci. It also looks at the changes Ford introduced to the marketing sector of
the company including product, price, and advertising. Other additional financial
evidence helps determine the extent to which Ford helped the company or if it was the
economy that caused Gucci to recover.
In terms of methodology, efforts were made to examine the topic through a comparison
of the two different era’s Gucci faced; first, when the Gucci family served as head of the
empire and second, when Tom Ford took over as the sole head of the empire. Due to the
challenges of reaching a man as famous as Tom Ford and availability of living Gucci
members, much of the information drawn upon comes from secondary sources. In terms
of secondary sources, the majority of my information comes from direct accounts from
Tom Ford and the Gucci family through autobiographies, life stories, and documentaries.
These were published accounts on the history and downfall of the House of Gucci, the
life and ideas of Tom Ford, and the change in marketing style between the two figures.
Other various secondary sources aided me to find information not easily available and
appear in the Footnotes throughout the essay.
Abstract Word Count: 312
2 Acknowledgements
• To Ms. Thomas, who acted as a supervisor upon my behalf for guidance and support
• To Mrs. Williams, who provided deadline support and guidance in the IB diploma
3 Table of Contents
Abstract
Acknowledgements
Essay
1. Introduction………………………………………………………………………..5
2. Gucci Background…………………………………………………………………6
3. Tom Ford Background………………………………………………………….....8
4. Gucci Finance …………………………………………………………………….8
5. Place (distribution)……………………………………………………………….10
6. Product……………………………………………………………………………10
7. Price………………………………………………………………………………11
8. Promotion (Advertising) …………………………………………………………12
9. Conclusion………………………………………………………………………..14
Appendix I…………………………………………………………………………..16
Appendix II………………………………………………………………………….17
Appendix III…………………………………………………………………………18
Appendix IV…………………………………………………………………………19
Appendix V………………………………………………………………………….20
Appendix VI…………………………………………………………………………21
Appendix VII………………………………………………………………………...22
Bibliography…………………………………………………………………………23
4 Introduction
In the 1990’s the House of Gucci faced economic hardships for the first time since the
company’s start up in 1922. By 2005, the House of Gucci was able to re-establish its
dominance in the luxury goods market. Many believe the turnaround started when a
single man walked through the Gucci doors. His name was Tom Ford.
This essay looks at and considers a number of factors leading up to Tom Ford’s arrival
and subsequent changes to Gucci. These include changes in advertising, price point,
product, as well as the change in financial standing of the company and management.
This Essay will provide evidence to support the argument that the marketing techniques
imposed by Tom Ford were the primary reason for Gucci’s turnaround.
This topic was chosen due to Gucci’s dominance in the luxury market today and my
interest in the fashion industry. In 2009, Forbes Magazine ranked the House of Gucci
third on the list of the 10 Most Powerful Brands with its value estimated at $7.47B
(Sherman. 2009). In the same year, Interbrand, the world’s leading brand consultancy,
named Gucci the biggest selling Italian brand of the year (Interbrand. 2009). Tom Ford’s
impact to Gucci is highly acclaimed to have been one of the most remarkable company
turnarounds in the history of fashion.
5 The Start of an Empire: A Brief History of Gucci
Sometimes the most powerful inspirations come from the most unexpected places. In the
late 1890’s for Guccio Gucci, his inspiration came from a lowly job inside the elite Savoy
Hotel in London. Amazed by the lifestyle and luxury of guests, Guccio surmised that the
secret to their wealth must have been in all the piles of baggage they took with them. He
had been so impressed with the beautiful workmanship and leatherwork of their luggage
that when Gucci returned home to Florence, Italy in 1922, he opened up a luggage shop
on via del Parione. Gucci made two commitments: his luggage would be made of the
finest quality and his company would always be family-owned and run.
It only took a couple a years for people to realize the great quality of Guccio’s work. As a
result Guccio started making small and expensive accessories such as belts and wallets
that would begin to develop the Gucci brand image. As part of the Gucci image, Guccio
created the famous “GG” logo, a logo known by many around the world. In 1938, Gucci
opened its second store in Rome (McKnight. 1987). By this time, three of Guccio’s sons,
Aldo, Vasco and Rodolfo, were involved in the family business. Guccio’s eldest and
illegitimate son, Ugo would be expelled out of the family business due to a way of life
Guccio felt partisan about.
On January 2, 1953 Guccio Gucci died peacefully of natural causes (McKnight. 1987).
Despite devastation felt by the family, it was also seen as a chance to expand the
company. Throughout his life Guccio was extremely conservative about how fast his
brand should expand and where stores should open (McKnight. 1987). Guccio never
believed in setting up a shop anywhere else besides Europe. However, when Aldo and his
brothers began expanding the Gucci brand, they set up the first transatlantic Gucci store
in New York City’s 5th Avenue later that year. Something they believed would vitally
help the company. After Guccio’s death, the company gained substantial publicity from
stars and celebrities such as Jackie O, Elizabeth Taylor, Grace Kelly, Peter Sellers, and
Samuel Beckett by increasing the amount of stores in the US. These celebrities grew as
some of Gucci’s most loyal customers. In particular, Jackie O’s loyalty to the brand
6 caused the Gucci designers to name a bag after her- the iconic Jackie O bag (McKnight.
1987).
As the Gucci brand started successfully expanding, family tensions also escalated. By the
1960’s Aldo and his three sons, Giorgio, Paolo, and Roberto, were working in the family
business with Rodolfo’s only son, Maurizio. In 1974, Vasco died leaving Gucci under the
control of Aldo and Rodolfo (McKnight. 1987). Heavier tensions between Aldo and
Rodolfo began to arise because of Rodolfo’s jealousy for Aldo’s massive amounts of
power, despite a fifty-fifty agreement they had. In 1983, when Rodolfo died, his half the
company shares went to his son, Maurizio (McKnight. 1987). This caused a bitter rivalry
between Maurizio and Paolo, who felt that Maurizio didn’t deserve such a high share.
During this, current president Aldo was starting to be questioned by authorities for tax
evasion. Aldo was eventually found guilty and faced jail time. Maurizio used this to his
advantage as he began to acquire more than 61% of the company’s shares, he had the
power to take control of the business and move Aldo out of power (McKnight. 1987).
Maurizio was elected the new president by unanimous vote. Once Maurizio took over,
Aldo was left as an honorary chairman of Gucci, Giorgio held the role as Vice President,
and Roberto held the role as Administrative Director. Paolo did not hold a position, but
had with just a smallholding of the company.
In 1989, Maurizio had no choice but to cut costs by closing 600 outlet stores. This
decision cut the company’s sales to roughly $200M in revenue (Fabrikant.1992).
Nevertheless, by the early 1990‘s Gucci was now facing bankruptcy due to poor business
management and reduced brand recognition. One of the most notable weaknesses
Maurizio encountered was the separation between business and personal life. Most
famously in 1988, Maurizio was briefly suspended from his presidency for forging his
father’s signature on share transfers to avoid paying for inheritance taxes and the
company was left to a board of directors (McKnight. 1987). Maurizio’s desire for his own
personal wealth came to him as a greater importance than the company itself. Gucci was
desperate for someone to restore its profitability and brand name to its once previous
strength.
7 A Star is Born: Tom Ford
The beginnings of Tom Ford were as unique as the man himself. On August 27, 1961 in
Austin, Texas, two real estate agents welcomed their first and only child into the world,
Thomas Carlyle Ford (Ford. 2002). The Fords moved from Austin to Santa Fe, New
Mexico where he would spend his childhood, a place in which he notably reflects as an
inspiration for him. By his teenage years, after graduating from Santa Fe Prep High
School in 1979, Ford left Santa Fe at 16 years of age, and enrolled in Bard’s College at
Simon’s Rock. He quickly dropped out after one year. Ford then packed up and headed to
New York where he enrolled in New York University, majoring in art history (Tom Ford.
2012). Similarly to Bard’s, Ford stayed only one year before dropping out to pursue an
acting career in TV commercials. Eventually Ford would receive an architecture degree,
although he still studied fashion, at The New School’s Parsons School of Design in New
York (Ford. 2002).
Ford’s first foothold in the fashion world began as a public relations intern for the
designer house Chloe. After graduating, Ford got his first real job at Cindy Hardwick’s
mid-priced Sportswear Company. Two years later, Ford moved to Perry Ellis where he
stayed for another two years. However he decided to move on due to his lack of interest
in working in American fashion. In 1990, he moved to Milan to join Gucci as the
company’s women’s wear designer. By 1994, Ford was appointed the Creative Director
of the House of Gucci (Ford. 2002). Creative Director is responsible for the design of all
product lines from clothing to perfumes, the management of the group’s corporate image,
and the creation of advertising campaigns and store designs. By this time Ford’s growing
role had caused creative tensions between him and Maurizio Gucci to the point where
Gucci wanted to fire Ford. But 1995-appointed CEO Dominico de Sole insisted on
keeping Ford (Ford. 2002). The Tom Ford era had begun.
Another Look at The Financial World of Gucci
In reviewing Gucci’s financial history, it is possible to justify that it was Ford’s
marketing techniques that saved Gucci as opposed to its new financial direction. The
origins of Gucci’s financial downfall started in the 1970’s within the Gucci family. Too
8 much fighting within the family kept the Gucci’s preoccupied using money for lawyers
rather than to benefit the company. In addition the Gucci family began involving
themselves in illegal affairs in order to save money. In 1987, during Maurizio’s
presidency, he was given no choice but to sell the company to Investcorp for $140M
(McKnight. 1987). This marked the first time in history that someone other than a Gucci
family member owned Gucci.
When Tom Ford named creative director of Gucci, the company was worth 4.3B dollars
despite bankruptcy (Hughes. 2011). In addition to a new creative director, Gucci also
appointed a new CEO, Domenico de Sole. Together, Ford and de Sole made a number of
acquisitions to regain financial ground. This consisted of strengthening the “Gucci Group
by buying out smaller fashion brands. Gucci acquired other fashion houses to raise its
financial position. That same year, Gucci acquired Yves Saint Laurent, Sanofi Beauty,
and Sergio Rossi. In 2000 it acquired Bouchern and 51% of Alexander McQueen and
Bétat and Co. In 2001, it acquired Bottega Venetta, Balenciaga, and 50% of Stella
McCartney (Ford. 2002) By acquiring more brands, Gucci was able to use their profits to
help drive Gucci out of bankruptcy. However, it still was not enough to improve Gucci’s
financial situation and in order to avoid bankruptcy Gucci created an alliance with PPR
(Pinault-Printemps-Redoute), a multinational holding company in 1999 (PPR. 2012).
Gucci created this alliance in order to stop another, multinational holding company,
LVMH, from taking over Gucci.
Another idea that poses challenges to Tom Ford’s legacy at Gucci is the failing of the
world economy during the time. The period right before Ford came to Gucci, the world
economy had faced a global recession. In 1990, when Gucci was at an all-time low, the
world GDP was at an estimation of $22B (World Bank. 1990). In 1993 when Ford
became creative director of Gucci, the world GDP was estimated to be $25B (World
Bank. 1994). When Ford left Gucci in 2004, the world GDP was at an estimated $44B
(World Bank. 2004). With the growth of the GDP, it can be speculated that growth of
disposable income was a direct consequence. More people were willing to spend the
9 money on luxury goods. This could suggest that Ford’s turn around of Gucci was luck of
the economy coming out of a recession, rather than his own hard work and skill.
Place: Rebuilding Relationships and Making New Friends
When Ford entered Gucci, there was more to Gucci’s problem than the product being
sold. Their relationships with producers and suppliers had been badly marred from the
Maurizio era and Ford was determined to fix them. Together he and de Sole rebuilt the
company’s relationships with suppliers that had been damaged due to Gucci’s inability to
pay them. The first decision Ford made was to move the company’s suppliers Tuscany as
the main supplier of their company. (Journal of International Management. 2011). Ford
picked this site because of the high artistic capability and small independent factories as
well as returning Gucci to its home country. In addition, new programs were set up to
provide select supplies with technical and financial support as well as “royal factories” to
increase manufacturing (Journal of International Management. 2011). Gucci now shared
its risks and mistakes with the manufacturing factories as well as flexible manufacturing
capabilities (See Appendix III). As a result seasonal and shorter production of goods were
introduced (See Appendix III). Finally Gucci started buying all of the leather used in its
products, but did 50% of the cutting, so that the quality of the products would stay in
Gucci’s control (Journal of International Management. 2011). As a result Gucci’s
production volume increased by 277% under Ford (Journal of International Management.
2011) to accommodate the increase of sales.
Product: The Gucci Girl
Gucci prided itself on being a company that always utilized classic style. The Gucci
icons, icons that still exist on Gucci’s store shelves today, included the horsebit detail on
bags, the bamboo handled bag, the green-red-green stripe, and the flora scarf, a scarf
introduced originally for Grace Kelly. Maurizio’s Gucci Girl would be seen wearing GG
printed shirts and GG buttoned fur trim coats (See Appendix II). But, although Gucci’s
products were durable and high quality, majority of the selection was still not in touch
with the modern shopper.
10 One of Gucci’s biggest struggles throughout history was finding the right time to
introduce change. Tom Ford felt that Gucci’s product were too ‘classic’ and needed to
appeal to a more contemporary woman. In Ford’s mind this meant sexier looking
clothing, “not necessarily [by] thinking she looks sexy this way or not sexy that way…
but… working with the body to make the girl as beautiful as possible” (Foley. 2004).
Ford found inspiration for new Gucci products from celebrities. He thought of the
celebrities of that age and what they wanted to wear. Based on marketing information
Ford created a whole new, more colorful Gucci line, combining with the existing iconic
elements of Gucci. Ford’s philosophy was to take both men’s and women’s clothing,
change the shape, change the cut, and add different color schemes. He believed in mixing
softer materials and silhouettes with tough structured pieces for this effect. Most of all
Ford believed in either a long and lean or a really short and tight look (Nellis. 2012). To
Ford, the new Gucci girl (and even boy) was confident and sexy, which he achieved by
combining hard and soft element such as sheer baby-dolls and leather with zippers
(Foley. 2004). The reception to his clothing was unfathomable and extremely popular.
Soon again everyone wanted to shower himself or herself in Gucci. On December 4,
2003, Gucci’s US store hit an all-time high, selling $4M worth of merchandise in a day
(Ford. 2002). Ford’s visions had been spot on.
Price: The New Customer’s Needs
The Gucci’s had always seen themselves as an elite luxury brand. This meant placing
Gucci on the market equivalent to its competitors: Chanel and Hermes (Appendix I)
(McKnight. 1987). Therefore, Maurizio raised the prices of Gucci goods as soon as he
became president - a costly business error. At the time, customers did not view the Gucci
brand similar to Chanel and Hermes. Buyers did not see Gucci as an elite brand and
began to value its products to a lesser degree. Maurizio, lacking adequate business and
analytical skill, ignored the customer’s complaints and continued to raise prices
(Appendix I). Maurizio also believed that Gucci’s goal should be to focus on a line of
costlier products (McKnight. 1987). Customers did not respond well since they were
11 being hurt by a recession, therefore spending was decreased. As a result, Gucci began to
lose many of its customers and started turning over smaller amounts of money each year.
When Tom Ford arrived in Gucci, he did not just bring great creativity, but also business
savvy. Ford not only labeled himself as a commercial designer: a designer that thinks of
his customer’s needs rather than desires, but he also saw himself as a good businessman.
He noted “If one doesn’t inspire people because of your clothes, they don’t buy your
clothes, and if they don’t buy your clothes, you can’t be a good businessman, because
you are not making money” (Foley. 2004). When Ford became creative director he
lowered prices by 30% on average on every item (Foley. 2004). Gucci was being
repositioned on a marketing perception map equivalent to Prada and Louis Vuitton
(Appendix IV). Lowering the price not only broadened the customer base, but it also
represented good value to customers. As a result Gucci’s profits rose by 90% within a
year of Ford’s launch of the new collection with sales totaling $500M in 1995. In 1996,
group sales reached $880M. Growth rates of leather goods were up 116%, shoes were up
128%, clothes were up 46%, and scarfs and ties were up 51% (Krebs. 2003). Finally Ford
placed Gucci products at the proper price point that was appropriate to its quality and
current customer perception. They should not have been competing with the luxurious
skins, embellishments, and embroidery as in Chanel and Hermes, when the products they
offered didn’t contain the same kind of flare.
Advertising: The New Contemporary
Advertising strategies had never come easy to the Gucci family. Ads featured models
dressed in Gucci clothing posed in elegant locations, focusing too much of the
surroundings and too little on the actual product (Appendix II). Under Maurizio, Gucci
promoted its product to shoppers between the ages of 16 and 60 (Fabrikant.1992). With a
larger frame of people to appeal to, Gucci would also need to market their product in
more places such as magazines and billboard ads. This large range of shoppers was not
realistic to Gucci’s advertising budget. In 1990, Gucci only had $10M budget to spend on
international marketing and advertising (Fabrikant.1992). In 1993, the advertising budget
had decreased to $6M (Fabrikant.1992). With this relatively little budget, it could not
12 complete with larger rival like Louis Vuitton, who spent an estimated $30M on
worldwide advertising (Fabrikant.1992).
As a commercial designer, Tom Ford knew how to display his ideas. If there was one
image Ford knew best, it was sex appeal. To Ford, Gucci was the “beacon of sleek, sexy,
modern design” (Carroll. Hurley. Treacy). Much of Ford’s advertising at Gucci was
characterized as sexy, risqué advertisements that caused much controversy (Appendix
III). UK Vogue once noted “from his velvet and satin touches at Gucci- accentuated by
the steamy photography of Mario Testino for his ad campaigns… both nudity and
sexuality seep from his presence” (Craven. 2011). With the increased budget in
advertising, he began using a controversial advertising campaign to gain media coverage
for the campaigns and boost awareness. In one instance, in order to promote a new
perfume ‘Opium’, Ford had nude images taken of model Sophie Dahl. This caused much
controversy in Britain and was banned by the advertising standards (Nguyen). However,
it also won many advertising awards though-out Europe, praising Gucci and Ford
(Nguyen), which resulted in increased sales. Ford also used fashion shows to promote his
new designs. Runways shows are very useful in providing exposure to a certain designer
and making certain style familiar to consumer without having to look in the store first.
(Franco. 2012) If a designer puts on a successful and memorable show, then consumers
were more likely to buy from that designer.
By creating a sexy image, Ford ensured that Gucci made itself distinctive with a feeling
of exclusiveness among its target audience. Ford created a new Gucci audience of
“women in their 20’s and 30’s, with high quality, fashionable products... who aspire to be
part of the jet set life” (Appendix IV) (Carroll. Hurley. Treacy). The idea was attractive
and desirable. Ford wanted the Gucci customer to desire and be attracted to this lifestyle,
whether they were already a part of it or aspiring to be a part of it.
Ford also believed the store itself was part of the advertising mix. He believed that they
“helped the world of Gucci stand for something” (Carroll. Hurley. Treacy) and by going
into a Gucci store, the customer should leave with an experience, thereby adding more
13 meaning and value to the actual product. Stores were created only on expensive streets,
attracting wealthy customers (Appendix IV). Window displays were more provocative
and the interior was made free flowing so that the customer did not feel congested in the
store. Even the salespeople began to serve as models for the company being smartly
dressed in black and ready to assist customers.
By increasing the budget, focusing on specific demographics, using a different, more
controversial sexy and vibrant image advertising campaign and modifying its stores, he
successfully increased Gucci sales and become a formidable luxury player in the
industry.
Conclusion To One Man’s Legacy
Never has anything been done in the fashion world like what Tom Ford did to Gucci. He
not only changed Gucci forever, but also left a mark on the entire fashion world. In 2004,
Ford took his final bow on the Gucci runway with his fall-winter 2004-2005 collection.
On April 30, 2004, Ford and de Sole were officially separated from Gucci due to
disagreements. When Ford left, Alessandra Facchinetti was promoted to creative director,
but was unable to create the excitement Ford had previously done. Succeeding her two
years later would be current creative director Frida Giannini. Although Giannini has been
able to produce successful collections, Ford’s sexiness would still be an aspect that many
women associate Gucci with. One of Ford’s implementations still in existence, is his
price point. The prices Ford implemented when he first became creative director of
Gucci, still stand as the prices the company works off of. Today Gucci still competes to
be one of the best brands in luxury sportswear against those of Prada, Louis Vuitton, and
recently Burberry. Another one of Ford’s implementations that has continued is the
location of its stores and their advertising campaigns.
In 2009, Forbes ranked Gucci third in their annual Top 10 Most Powerful Brands list with
a value of $7.47B (Sherman. 2009). Currently Gucci is the biggest Italian selling brand
with 278 directly operated stores worldwide and revenues of $5.3B (Gucci. 2012). Last
year in 2011, Interbrand named Gucci the 39th most powerful brand with a value of
14 8,763 - it’s highest to date (Interbrand. 2011). Ford’s legacy does not end with Gucci.
Ford pioneered the ‘return of the sexy model’. In a time that ‘heroin chic’ characterized
the fashion world and sexual glamour was masked by the epidemic of AIDS, Ford
brought back a period of debauchery. The career’s of supermodels such as worldsrichest-supermodel, Gisele Bundchen, would have never happened if it wasn’t for this
movement. Ford did not only change the trends of Gucci, but also for the rest of the
fashion world. Designers today look at his creations for inspiration for their own
collections. High quality department stores such as Neiman Marcus and Saks Fifth
Avenue benefit off of Ford’s vision because he focused on commercialism (Patner.
2004).
In conclusion, the marketing techniques imposed by Tom Ford at Gucci immensely
affected the turnaround of the company’s future. Whether it was his product change,
price change, or controversial advertising, Ford successfully changed Gucci, improving
its sales and right-sizing its cost, which was vital for its survival. Although it may be
argued that all Gucci needed was new management to thrive, Ford’s legacy within the
fashion world proves that he was more than a designer trying to turn around a failing
company. He was considered the leader of a major fashion revolution. Finally Ford once
told Time magazine that, “People are buying into your dream… To create that world
sucks the soul and personality out of the designer. The Gucci stores look like my house.
My sofas are in all the Gucci stores all over the world” (Craven. 2011). This statement
shows the heart and soul that Tom Ford put in to rebuild the company to not make
products that he would personally wear himself, but to show that he wanted to make
Gucci part of everyone else’s household too. With having done so much, it is almost
impossible to think what Gucci and the rest of the fashion world look be like if Tom Ford
had indeed been fired.
15 Appendix I: Ansoff’s matrix Gucci under Maurizio
Market Penetration:
Product Development:
• Gucci’s markets were reducing because
• Gucci was suffering over resilience on
customers started to perceive their
product and did not keep up with the
products as “old fashioned”
changing behaviors of the consumer.
• Poor advertising did not help Gucci
• Gucci did not design new products at a
increase its customer base
lower price point.
• The classic Gucci look consisted of
Gucci printed apparel only and did not
experiment with many types of fabrics.
Market Development:
Diversification:
• Advertising budget was low compared to • Gucci had built itself on ‘classic’ styles
competitors to adequately penetrate
• Gucci had a hard time reaching the
contemporary customer.
• Any new products Gucci was making had
astronomical prices that many couldn’t
afford.
16 Appendix II: SWOT Analysis of Gucci under Maurizio Gucci
Strengths:
Weaknesses:
- Excellent brand name
- Out of date advertising methods
- Customer loyalty
- Declining profit margins
- Family company
- Quantity control problems
- Well-trained management
- Price control problems
- Internal conflicts
- Not expanding into new markets
- Relationship with producers/suppliers
- Did not focus on clothes in
advertisements
- Poor management
Opportunities:
Threats:
- New management brings in changes
- Competition
- Although its brand name slightly
- Customer satisfaction declining
declined, they could still capitalizing
- Recession
on existing brand name
-­‐ Untapped markets 17 Appendix III: SWOT Analysis of Gucci under Tom Ford
Strengths:
Weaknesses:
- New relationships with producers and
- Gucci customers were losing interest
suppliers
in the company they did not feel
- Shared risks with its manufacturing
Gucci was worth it’s price
companies
- Gucci was in bankruptcy at that time
- More flexible manufacturing
capabilities
- New contemporary image
- Strong product portfolio
- Controversial ads gave Gucci
publicly
- Create a new ‘Gucci’ image
Opportunities:
Threats:
- With an expanding budget, Ford
- New competition
could experiment on different types
- Public reaction to controversial ads
of fabrics and styles and still have
- Tom Ford coming off too strong
financial assurance if a collection was
towards the public
not well received.
- With lower price points, had the
opportunities to branch to a lower
luxury market and attract the middle
class.
18 Appendix IV: Ansoff’s matrix Gucci post Ford
Market Penetration:
Product Development:
• Ford used the trendy jet set lifestyle to
• New products with more colorful Gucci
attract customers to the brand in the
line
luxury market.
• Changed the shape and cut for both
• He wanted to expand the luxury market
men’s and women’s clothing
so that middle class customers would feel • Began mixing softer materials and
the need to buy Gucci in order to make
silhouettes
the customer feel like he or she was part
• He made all new products that contained
of the luxury lifestyle
sex appeal, however remained a classic
look it was known for.
Market Development:
Diversification:
• Ford was able to build customer a new
• Gucci Group acquired Yves Saint
customer brand that included celebrities.
Laurent, Alexander McQueen, Stella
McCartney, and many others.
• Ford made buying Gucci clothes an
experience rather than a job.
19 Appendix V: Image of Tom Ford
(taken from http://www.tomford.com/#/en/thebrand/tomford)
20 Appendix VI: Gucci Equity Holdings
Italy (Guccio
U.S.A (Gucci
London (Gucci
Gucci S.p.A)
Shops, Inc)
Ltd.)
Aldo (Honorary
Lifetime use of
His company
Via Vanguard, 40%
chairman)
voting rights,
Vanguard Ltd
dividends, and
controls, 16.7%
benefits, of 40%
Maurizio
Via his Gucci
Via his Anglo-
Via Anglo-
(Suspended
Finanziaria
American
American, 45%
president)
company, 50%
Manufacturing
Researches Ltd.
Company, 50%
Giorgio (Vice
From Aldo 20%,
president)
Via his company
Via Gika, 11%
Via Gika, 3.3%
Via Anfers, 11%
Via Anfers, 11%
Via retailing, 11%
Via retailing, 3.3%
Gika Ltd., 3.3%
Roberto
From Aldo 20%,
(Administrative
Via his company
director)
Anfars Ltd., 3.3%
Paolo
Via his company
Retailing
Wholesalers
Promotions Ltd.,
3.3%
(taken from: McKnight, Gerald. Gucci: A House Divided. New York: D.I. Fine, 1987. Print.)
21 Appendix VII: The Gucci Empire
Gucci Companies- dates of Incorporation
Guccio Gucci
(became 1. Societa Anomia Guccio Gucci
1923
1939
2. Guccio Gucci srl.
1945
3. Guccio Gucci spa.
1982)
Gucci Shops, Inc. (U.S.)
1953
Gucci Ltd. (U.K)
1961
Gucci et cie (France)
1963
Gucci Boutique
1963
Gucci (Hong Kong) Ltd.
1974
Gucci Parfums (Italy)
1975
(became Gucci Parfums spa.
1982)
Gucci Stores- opening dates
Florence
1923
Rome
1938
Milan
1951
New York
1953
London
1961
Paris
1963
Palm Beach
N/A
Bal Harbour
N/A
Beverly Hills
N/A
Chicago
N/A
Hong Kong
1975
(Buy out of six I. Magnin Gucci Boutiques in U.S.)
1985
(taken from: McKnight, Gerald. Gucci: A House Divided. New York: D.I. Fine, 1987. Print.)
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