Hera Cha

Khushali Javeri

Becky Wilson

LIR 554

October 25, 2006

Brands under Gucci Group

• Gucci• Bottega Veneta• Yves Saint Laurent• Boucheron• Bedat & Co• YSL Beaute• Balenciaga• Stella McCartney • Alexander McQueen• Sergio Rossi

History of Gucci• Guccio Gucci opened a

small shop selling leather goods on the via del Parione in Florence in 1923

• Family operated business

• After WWII: internationally recognized as a luxury brand

Miscellaneous Facts

• Majority of products are manufactured in the Florence region

• Top international markets– Asia– United States – Europe

• Asian culture and lifestyle encourages luxury brand purchases

Gucci’s New Era• New leadership

• Revamping image (conservative vs. modern)

• Price adjustments (Porter’s Demand Conditions)

• Aggressive marketing campaign

• Emergence of tourism as a major revenue stream (Porter’s Demand Conditions)

Gucci’s New Era cont.

• Revamping store layout to increase store sales (Porter’s Firm Strategy, Structure, and Rivalry)

• Gucci provided training for its suppliers to ensure quality (Porter’s Factor Conditions)

• Strong business relationship with shoes suppliers • Increased demand for luxury leather products

which resulted in increased dependence on Italy’s leather market (Porter’s Related and Supporting Industries)

Gucci’s Competitors

• LVMH Group

* Louis Vuitton, Givenchy, Guerlain, Dior, Moet & Chandon, Veuve Clicquot, and Dom Peignon

• Prada

Gucci’s Competitors cont.

• LVMH displays increased interest in Gucci– Jan 1999: LVMH largest shareholder of Gucci at

34.4%

• March 1999: PPR (largest non-food retailer in Europe) purchased 40% of Gucci (Porter’s Firm Strategy, Structure, and Rivalry)– Diluted LVMH holding to 19.6%

• LVMH relentless in attempts to acquire

Questions?