Gucci Group chief executive Domenico De Sole and creative director Tom Ford will leave the Italian luxury and fashion house in April after months of wrangling over the terms of new contracts ended in failure, De Sole said Tuesday.
The duo, credited with Gucci’s transformation from near-bankruptcy in 1994 into the world’s number three luxury group by sales, had been in talks with French parent company Pinault-Printemps-Redoute SA over renewal of their contracts, which expire next year, The Associated Press reports.
“It’s no secret we were negotiating with PPR about our roles beyond the middle of next year,” De Sole said in a conference call with analysts and reporters. “We talked long and hard and in the end we were not able to reach an agreement that was satisfactory to all concerned.”
De Sole, who emphasized the “amicable nature” of the separation, said he and Ford would remain in their jobs until the end of April the same month that the options expire, the AP reports.
PPR chief executive Serge Weinberg said in the same call that De Sole and Ford had been “key drivers” of the success of the core Gucci brand and others held by the group, which include Yves Saint Laurent, Sergio Rossi, Boucheron, Alexander McQueen, and Stella McCartney, the AP reports.
Weinberg reportedly said the search was under way for their replacements.
The parent company CEO had said repeatedly he would prefer to see different designers in charge of Gucci’s core brand and the French fashion house Yves Saint Laurent, the AP reports. Tom Ford’s determination to keep creative control of both was one of the obstacles to a successful negotiation of his contract renewal.
De Sole, 59, was paid $2.6 million in Gucci’s last fiscal year to Jan. 31, while 42-year-old Ford made about $6.28 million. They each have almost 2 million Gucci stock options.
Gucci Group last month posted net profit of $26.1 million for April-July, 47% below the same period of 2002. The company attributed the fall to the stronger euro and the slump in global tourism key to luxury sales.
But De Sole reportedly said Tuesday global sales had picked up sharply in September and October, indicating an imminent return to operational profitability as what he called the “luxury goods recession” bottomed out.
He and Ford had taken on a company that was “on its knees and unable to meet its payroll obligations,” he reportedly said, and were leaving behind them a fashion “powerhouse” worth more than $8.5 billion.