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Tom Ford and Domenico De Sole — the dynamic duo who built Gucci Group into one of fashion’s hottest houses — stunned the industry Tuesday by announcing their plans to resign, effective April 30. The decision ends months of speculation over their contracts amid growing tensions with the group’s majority owner, Pinault-Printemps-Redoute, about management control and whether Ford could oversee multiple collections.
The move is destined to have far-reaching repercussions and unleashed a flurry of speculation about potential successors — and possible future projects for the two men in their post-Gucci careers.
Creative director Ford and president and chief executive officer De Sole have not given any indication of their intentions beyond April 2004. As part of their exit agreements, the two men will not be impeded by any non-compete clauses and can pursue other ventures in the fashion business. However, sources indicated they are forbidden from poaching any Gucci Group employees for a period of one year.
De Sole was evasive about his ambitions. On a joint conference call with Serge Weinberg, ceo of PPR, with analysts and journalists, a relaxed-sounding De Sole joked that his only plan for the future was “getting instruction from my wife, as usual.” He also said that he negotiated his contract in good faith and did not seek other job offers over the time period.
Ford could not be reached for comment Tuesday. In a statement, the designer said, “It is with great sadness that I contemplate my future without Gucci Group.”
Friends who talked with the designer after the news described him as “devastated” by the developments.
News of the pair’s exit hit the market capitalization of both Gucci and parent company PPR. Gucci shares, which last month rallied on the company’s bullish forecasts for the remainder of the year, lost 2.1 percent to close at 73.65 euros in Amsterdam, while shares of PPR shed 4.8 percent to close at 84 euros in Paris.
Gucci shares closed down $1.11, or 1.3 percent, at $84.96 in New York Stock Exchange trading Tuesday.
Analysts have long said that Gucci’s share price value was so intrinsically linked with the talents of Ford and De Sole that their departure would hit its stock considerably. Such a scenario greatly increases the probability that minority shareholders will sell their stock to PPR next year when the French group must offer $85.52 per Gucci share — a move that will likely delist Gucci from the stock exchange and make it a wholly owned subsidiary of PPR.