![]() It was time for Gucci to climb up the ladder again. By 1999, luxury goods were a $60 billion industry, with sales growing 6% per year. There was no return to Investcrop and in order for them to continue supporting Gucci they needed to force Maurizio out. Not only Gucci but also the entire industry was suffering from the economic crisis. The sales were dropping even more and the direction of the company was unclear. Maurizio’s repositioning was not working. Investcrop, a Bahrain-based investment group that was backing Gucci financially, thought it was time for Maurizio to step down from his position. Maurizio missed one critical aspect which was the customer’s perception. Gucci’s reputation was severely destroyed that it was hard for the customers to see it as a luxury brand. The price points of the products were competing against Chanel or Hermes however, customers valued less. Despite his grand plan, Maurizio lacked business and analytical skill to rebuild the company. He raised price, reduce and control distribution, and bought back franchises to reduce overexposure. Maurizio did what any businessman would do to bring up the company again. Maurizio positioned Gucci next to Chanel and Hermes. On the other hand, Maurizio had a grand plan of his own, creating $1 billion company by limiting distribution to exclusive clientele. He expanded Gucci’s control over distribution, reducing channels and acquired all of Gucci’s North American franchises in three years. He fired 150 out of 900 employee and hired highly experience managers in retail business. De Sole was a smart businessman he saw the need to restructure the whole company. He was a Harvard Law School graduate and became the first professional manager to play a senior role at the family-run company. When Maurizio was in control of Gucci, his first move was to name Domenico as president and managing director of Gucci America. One year later, Maurizio seized control over Gucci and determined to transform Gucci into a modern retail organization. Rodolfo Gucci died in 1983 and left his 50% stake in the company to his son Maurizio. Most of the conflict was between Aldo and Rodolfo Gucci, the founder’s surviving sons over strategy and control of the company. In the1970s Gucci began to fall down due to internal conflict. Gucci became an internationally known luxury brand after World War II and over the next two decades the company flourished. He faced shortage of imported leather yet this challenge gave him innovated idea of using new materials such as canvas and produced small leather goods, wallets and belts that are still big part of the Gucci company. The business in the 1920’s created huge profit and success however in the 1930’s Gucci began to face some challenges when the sanctions imposed on Mussolini. As the luggage business prospered, he opened his own workshop to produce his own design. He sold luggage imported from Germany and offered customers with repair services. Guccio Gucci opened a small shop selling leather goods on the via del Parione in Florence in 1923. ![]()
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