GUCCI GROUP N.V. (A)
Gucci is one of the most glittering names in the luxury world. The trademark of red-and-green striped webbing & GG logo became known worldwide. Gucci have $3 billion in hand to expand their business. By keeping in view this case study I suggest that Gucci should move towards multi-branding. Because Desole was confident that Gucci’s creative team would be able to recreate its magic at YSL. And the future of Gucci really lies with multi-brand groups.
Gucci faced the challenges from LVMH. LVMH considered adding Gucci to his stable of brands but balked at the asking price of $350 million. So, Gucci is not secure if Gucci not acquire the multi-brands than, any other company may acquire it.
Gucci retained deep roots in Italy, and it was a remarkably international company, even before becoming a multi-brand group. Gucci’s core customer was a wealthy, somewhat conservative & older woman. These customers are fashion & style oriented customers. Style oriented customers are more brand loyal than fashion-concious customers. When Gucci start multi-branding these customers are ready to buy these products with the brand of GUCCI.
Gucci acquired Sanofi Beaute, it split into two companies YSL ready-to-wear and accessories, & YSL Beaute which managed the fragrance & cosmetics brands. The Sanofi Beaute transactions transformed Gucci into a multi-brand group with $3 billion in cash. It shows that multi-branding is profitable for Gucci. Because when Gucci provide the shoes and cosmetics with their own brand after acquiring the already existing powerful brands of these products. Gucci’s customers are more willing to buy these products.
The future of Gucci is secure with the multi-brand group. It increases the profitability and market share of Gucci.
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