30 Apr The Turbulent and Exciting History of Gucci
In 2010, Gucci is one of the top luxury fashion brands in the world. The official name of the company is “The House of Gucci” since it is one of the famous Italian fashion houses. However, Gucci is actually owned by a french conglomerate called Pinault-Printemps-Redoute (PPR). The founder of the brand was Guccio Gucci who founded the brand in Florence, Italy in 1921. The brand is most famous for Italian fashion and leather products. One thing that sets Gucci aside from other brands is that is the top selling Italian brand in the world.
The story of the brand is an interesting and turbulent one since its humble beginnings in 1921. Guccio Gucci in 1921, it wasn’t until 1938 that Gucci expanded out of Florence and opened a new boutique in Rome. When Gucci died in 1953, he left his fashion empire to his 4 sons. His son Aldo was central to the brands expansion into the world market since he opened the first Gucci boutique in New York. Further expansion, into Hong Kong and Tokyo occurred in the 1960s where Gucci was creating their own trends via celebrities like Jackie Kennedy, Grace Kelly, etc.
However, during this time the family was in constant in-fighting. Reports at the time suggested the family fought during board meetings about inheritance, stock holdings, and how to operate the company.
The company hit a terrible rough patch in the 1970s and leading into the 1980s. At that time the brothers Rodolfo and Aldo controlled the company with equal shares. This occurred once again, due to complicated family fights. The company launched their accessories and perfume division and began to wholesale aggressively in order to expand that division. Aldo had developed that division and his intention was to focus on it in order to weaken the control of his brother Rodolfo. The perfume division was priced cheaper than other products and aggressive wholesaling made it available for sale in over 1000 stores. The result was the brand image was severely tarnished. The public now viewed Gucci as a cheap airport brand and not an exclusive luxury brand. Furthermore at the same time, widespread Gucci knock-offs started to appear on the market further weakening the brands image.
In 1983, the company was suffering financially and in brand image. Paolo Gucci (son of Aldo) proposed the idea of launching a cheap version of Gucci called Gucci Plus, the idea was not well accepted by the family. During a Gucci boardroom meeting about this issue Paolo was knocked out by an answering machine to the the face, by one of his brothers. For revenge, he reported his father to the United States authorities for tax evasion. His father was convicted of tax evasion and sent to prison after his son testified against him in court. These stories generated more interest in the Gucci family, then the brand’s advertising could possibly achieve at the time.
Rodolfo died in 1983. This resulted in changes in the power structure of the company (family). His son Maurizio Gucci inherited his 50% share of the Gucci company. Aldo’s son Paolo along with Maurizio teamed together to take control of the Board of Directors. Shortly after, the rest of the family left the company. This led Mauricio to seek help and ideas from outside the company in order to strengthen the brand and the company and operate peacefully.
Gucci Shoes became one of the companies strong points. Gucci found following the disasters of the 1970s and 1980s that a return to its roots as an elite Italian fashion house was a must. They realized that it was impossible to be both a mass production brand and a luxury brand. The leather goods like Gucci shoes had given the company its name in the 1920s and 1930s and they felt they needed to focus their efforts on fashion innovations in those areas. Furthermore, in 1997 Gucci took over Severin-Montres and rebranded it under the Gucci name. The watchmaker was one of the most respected in Europe at the time and contributed to Guccis goals of maintaining their prestige and elite image amongst fashion conscious and wealthy consumers.