Storytelling In The News: #87

The story of Tom Ford, Gucci, YSL and French fashion

March 13, 2004

On Thursday, March 11, we made a visit to Paris to see what is the top business story in France. Would it be the stagnant European economy? Or the high levels of unemployment? Or the ballooning US trade and budget deficits, that threaten the stability of the entire world economy? No. The top business story in France was the replacement of Tom Ford as head designer for Gucci and Yves Saint-Laurent (YSL) by -- gasp! -- four unknown designers.

The end of the Tom Ford epic

"Fin de la saga Tom Ford," ["The End of the Tom Ford Epic"] wailed French Vogue. Tom Ford wasn't exact dead, but it felt to fashion fans that something had died. In fact, Ford was merely doing his last show for YSL, after a messy divorce from the business-owner of both houses, Pinault-Printemps-Redoute (PPR). From now on, Yves Saint-Laurent would be a "forbidden city" to Tom Ford, who departed after his last collection for Yves Saint-Laurent for an "intimate dinner" at the Lucas Carton restaurant with sixty of his "close friends". The article didn't specify how many "close friends" a man like Tom Ford might have, but clearly sixty was just a sliver.

Ford and his business partner, Domenico De Sole were also ending their fifteen year relationship with Gucci. When he had taken over the creative reins, Gucci was a bankrupt manufacturer of old-fashioned handbags. Ford and De Sole turned it into a $3.2 billion company fashion powerhouse with sharp sexy clothes and marketing that turned Ford himself into a fashion celebrity. Ford has been the creative director at YSL for the last four years. Now the relationship between Ford and the PPR group was ending because of a failure to reach agreement about the future.

The story of a messy divorce

For fashion fans, Ford’s valedictory collections for Gucci and YSL should have been a hero’s farewell. Instead, like a messy divorce, a game of spin and counterspin was waged over the reasons for the impasse over the new contracts and the future strategy of Gucci group.

The catfight between Ford and Serge Weinberg, the chief executive of PPR, started last week on Wednesday when, in spite of a my-lips-are-sealed agreement for all parties, Weinberg was reported as saying that "the debate about whether it's the designer or the brand that is more important is open," and citing the example of Prada as a luxury house with a team approach. "No one talks about Miuccia Prada," Mr. Weinberg said. "No one knows it's she who designs the Prada brand."

It escalated on Friday when Mr. Ford, speaking in Women's Wear Daily, called the Pinault chief "naïve" and said that Mr. Weinberg didn't understand Gucci or the luxury business.

So before the first stiletto heel had even hit the runway at the Yves Saint Laurent show on Sunday, it was daggers drawn between the outgoing designer, Tom Ford, and the parent company, Gucci Group. It was a spat reminiscent of the warring Gucci family, whose taste for greed, glamour and gore brought the leather goods company to bankruptcy. Ford publicly accused Serge Weinberg, chief executive of PPR (Pinault-Printemps-Redoute), of wanting to control Gucci -- a truly surprising accusation to make of any CEO.

Weinberg, for his part, made the equally surprising accusation that Ford wanted money. "Money had absolutely nothing to do with it at all," replied Ford. "It really was a question of control, and fortunately or unfortunately, I realize that I have nothing to learn about luxury from Serge Weinberg. I actually said this to Serge and I think that put the nail in the coffin."

"I have a lot of respect for Tom Ford's talent and I understand his disappointment," Weinberg replied. "His presentation of the negotiations is completely inaccurate but in accordance with our commitment I will make no comment at this stage."

So Ford is leaving and from now on, Weinberg intends to follow a strategy of anonymity. The accent will be on the clothes, not the designer as superstar.

A brand narrative of anonymity

The planned strategy of anonymity is disconcerting to a fashion world that is used to bold-face names like Karl Lagerfeld at Chanel and John Galliano at Dior, although it is the strategy used at Calvin Klein. Its new owner, Phillips Van Heusen, replaced the retiring designer with his deputy.

How do you get women to pony up $20,000 or so for a single dress? Exclusivity is clearly a big part of the picture but that's not the whole story: being able to meet a fashion superstar in person is also in play. American retailers, for whom the ‘‘trunk show’’ or personal appearance by a designer can net $1 million, are dubious about a faceless image of a four person design team.

"It’s like baseball players," said Joan Kaner, fashion director of Neiman Marcus. "If they bring in the crowd, they get the bucks."

People who follow fashion, who understand the triumphs and disappointments of the creative process, do not for a minute trouble themselves with the question of whether designers are egocentric stars. They accept that without strong personalities — even without the wreckage that accompanies strong personalities like Yves Saint Laurent himself — you don't get a fashion worth caring about.

But how genuinely successful has Ford been for PPR group? His contribution to Gucci itself is incontestable. At YSL, the picture is less clear. One source at PPR itself said that ‘‘at Gucci, Tom has been a genius; the rest is a disaster.’’

In a sense, Mr. Weinberg comes to fashion as a rational man. "I tend to be factual," he said in an interview in December. But fashion is the opposite of rational. It is an irrational battlefield.

Can a rational man succeed in an irrational enterprise? Weinberg was aiming at "un changement dans la continuité" ["a change through continuity"] by hiring four of Ford's former assistants to continue the two houses, Gucci and YSL. But it is "a risky gamble" according to La Tribune to try to build a business on anonymity when it has depended in the past on starpower.

The possibility of licensing and brand dilution

Weinburg sent further aftershocks through the fashion industry by hinting that another his famous fashion houses, Balenciaga, might start licensing its products. According to the International Herald Tribune, Kaner, was horrified at the idea of any luxury brand contemplating licensing.

"I am afraid we would be going back to square one," Kaner said. "When I was first in retail, there were Gucci bags all over the place. Now they have created an image and turned it around."

The stock market has yet to be convinced

What will the future bring? According to Weinberg, PPR is charting its future by taking a lesson from its past. More than a decade ago, Ford was an anonymous in-house designer at the failing Gucci brand when he was chosen to shape an aesthetic vision for the company. "We just tried to apply common sense," said Weinberg. "The story of fashion is filled with stories of unknown designers."

But do Weinberg and PPR really know how to manage a luxury brand? The stock market is not yet convinced. According to L'Express, 2004 will be decisive, since it will be five years since PPR began trying to persuade the market that it knew how to turn luxury brands into geese that lay golden eggs. So far, PPR hasn't succeeded. PPR's shares were worth 200 euros in July 2000. In 2001, in a declining market, they fell faster than the overall index, CAC in 2001, and are now selling around 85 euros, a 60% drop.

Weinberg is hoping to write new stories for Gucci and YSL with a new cast of characters. According to L'Express, this may be the last throw of the dice for this rational man in an irrational business.

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