Gucci Group

1070 Words Nov 13th, 2009 5 Pages
Executive Summary Gucci Group is a luxury goods retailer focusing on improving their market share while producing high quality fashionable items. Initially, Gucci’s poor business strategy and internal family conflict directly resulted in decreased sales and net income. When Investcorp took control of the company, Gucci regained their success through quality management and acquisitions. Gucci’s product line now includes a large range of products. We would like to continue Gucci’s success and believe that the next major business decision for Gucci is how to manage the new acquisitions. We recommend that Gucci cease further acquisitions of companies to its portfolio and should not challenge the status quo by making big management changes …show more content…
We can also leverage the strength and popularity of the Gucci brand to gain distribution for the smaller names, much like how LVMH leveraged Louis Vuitton’s popularity. By holding off of new acquisitions, Gucci can learn to handle the four brands they currently have before adding extra brands.
• Cons: Four brands with their own management structure may prove to be difficult for De Sole to wrangle, as the managers could bring their own management styles that may not mesh well with De Sole’s style. With the current hold on acquisitions, Gucci may miss out on opportunities to acquire strong brands.

Alternative 2: Increase acquisitions in a number of diverse companies.
Most luxury brands have been family-owned or -controlled and, consequently, were single-brand firms for the most part. However, mergers and acquisitions have been growing in the industry, with LVMH leading the way. Our strategic recommendation is to follow LVMH’s lead and acquire a multitude of diverse companies to build the Gucci portfolio.
• Pros: Family ownership of the Gucci Group had dissolved with the drama and tragedy that plagued the Gucci family, so moving away from the ‘family-owned, single-brand’ system seems
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