GUCG Unraveled

Reports on all things Gucci

GUCG Stock Update

According to NASDAQ online on Saturday October 8th at 6:47pm the last close for the Gucci Group was $24.00. The previous sale was not altered. Over about a five week period there have not been any significant changes in the stock reports. Generally, the Gucci Group has stayed in the $24.00-$26.00 range.

A Greener Gucci

Gucci has tagged along with many other luxury designers in the business who are making a more conscious effort to “go-green”. From becoming more rigid on their packaging standards, to vowing to use less paper the Gucci Group is helping the environment in more ways than one. They recently teamed up with sunglasses producer Safilo to design a line of shades made with bio-based materials, like castor oil seeds. This aids in the sunglasses being more recyclable and bio-degradable in their end use. The process of creating these new style of sunglasses actually eliminates CO2 emissions tremendously. The brand is now FSC certified in their paper standards which makes their paper products 100% recyclable. In addition, their bags, boxes, and tissue paper will no longer contain plastic laminate. They also altered the sate of their garment bags from polyester to cotton. Mimma Vigelzio, Gucci Group’s ECP of Communications quotes,

We hope our actions will also raise awareness inside the fashion industry that it’s possible for our industry to make a difference for rainforests and for the climate.

All Press is Good Press

While researching the Gucci Group in order to find any information on the social aspect of the brand, I came across quite a few different answers to the same question. There seems to be a discrepancy on where exactly Gucci products are manufactured. For the most part, it looked like Gucci stayed true to their roots and primarily manufacture their goods (aside from timepieces) in Italy; however, some sources cited the US and Spain as other main manufactures for the luxury brand.

There was an article I found that may have raised a few eyebrows though. PPR, Gucci’s parent company, has had some issues with the international factories that produce their products. Countries who were included on the list of less than good working conditions were in India, the Philippines, Thailand, Indonesia, Romania and Pakistan. Reading the list of issues these workers deal with in foreign countries was appalling. For example, in the Philippines workers don’t even get the healthcare, retirement, or housing assistance that they are legally contracted to have. All across the board, these workers are making far less than minimum wage. In India, women, who sew all the garments from their home, make profit based on how many garments they make; however, they barely make 1% back on each piece. Romania’s factory conditions seemed to be the most severe, but corporate stated that unless they have issues with the products when they receive them, they have no use to inspect the conditions of the factory or workers. I feel publicizing this quote will definitely give people a negative image of the brand if no one else from the company releases a statement on the issue.

Amongst all this negatively surrounding the Gucci name, I did find something that promoted the brand in a positive light. Gucci has teamed up with the Tribecca Film Festival to create what is known as the Gucci Tribecca Documentary Fund. The fund sponsors independent filmmakers who make documentaries surrounding current social issues around the world. By winning an award from the fund the filmmakers are funded financially and given opportunities for their work that they probably would not have had without the help of the Gucci Group. They also partnered with PRP Corporation Fund for Women’s Dignity & Rights to spotlight  women filmmakers of documentaries that deal with women’s issues and the challenges that they face today.

Family & Finance Don’t Mix

The Gucci Group, like many empire brands, is under an umbrella company which manages other luxury brands as well. I learned a few interesting financial quotes of the Gucci Group from it’s overhead company, PPR. PPR’s CEO and chairman is Francois-Henri Pinault (Sound familiar? He’s  husband to actress Salma Hayek & recently outted father of supermodel Linda Evangelista’s four-year-old son.) PPR also manages other luxury houses, such as Yves Saint Laurent, Alexander McQueen, Stella McCartney, Balenciaga and others. From their website I gained some statistics of their finances from the first half of 2011.

  • PPR’s Reoccuring Operating Income went up 5% in the past year, the Gucci Group contributed 765 million (Euro) to the ROI for that year
  • Gucci brought in a revenue of 2,666 million (Euro) last year alone
  • The majority of Gucci’s revenue is due to leather goods (57%) and the other leading aspects include ready-to-wear (13%) and shoes, also at 13%

The brand has not always been doing favorable in the market place. In the 1980s family disputes nearly landed Gucci bankrupt by the early 1990s. This article highlights the turn around in Gucci finance over the past decades.

As a result, shares in the firm were sold to InvestCorp International, which eventually won full control in 1993 and took Gucci public. A new management team and a revamped image, coupled with excess capital, soon enabled Gucci to reach unprecedented financial success, and the company then began a series of strategic acquisitions, which includes the French fashion house Yves Saint Laurent, Boucheron, Sergio Rossi, and Balenciaga. Gucci now has over 200 franchised and company-owed stores worldwide.Read more: http://www.answers.com/topic/gucci-group-nv#ixzz1ZNo5VZqS

Who Runs the Show

There are many important chiefs in charge of the Gucci America Incorporation. Here is a list of just a few the head directors of the infamous brand. All can be reached at the U.S. headquarters in Secaucus, New Jersey.

  • Director, President & CEO – Daniella Vitale
  • CEO & Vice President of Operations – Tony Mauro
  • Senior Vice President of Marketing & Communications – Susan Chokachi
  • Director of Worldwide Public Relations Special Events & Promotions (Italy) – J.J. Martin

Probably the more well-known leader in the Gucci brand would be Frida Giannini (pictured below), the current creative director of the brand since taking over in 2005. Giannini formerly worked in the accessories department before moving onto menswear and eventually becoming sole creative director.

Gucci From the Beginning

As a blog on all things Gucci, I’d like to start with some of the brand’s history to see just how far it’s come in it’s 90 years.

It was 1921 and Guccio Gucci had just opened his small leather goods shop in his native town of Florence, Italy. Although today we think of the global brand as the epitome of Italian luxury, Mr. Gucci actually pulled inspiration from the aristocratic aesthetics he witnessed while working in London, England. The beginning of the iconography of the brand began in 1940 as a result of a textile shortage. The company was forced to become innovative with new types of textiles including hemp, linen, and jute. The result was the quickly sensational Bamboo bag, made by burnishing cane. The brand’s evident success is marked by the 1970s opening of the Tokyo and Hong Kong Gucci stores. Today, Creative Director Frida Giannini continues to uphold the standard of Italian luxury with her highly acclaimed runway shows each season.