Gucci was founded in 1921 by Guccio Gucci. In 1938, Gucci expanded and a boutique was opened in Rome. Guccio was responsible for designing many of the company's products. In 1947, Gucci introduced the Bamboo handle handbag, which is still a company mainstay. During the 1950s, Gucci also developed the trademark striped webbing, which was derived from the saddle girth, and the suede moccasin with a metal horsebit. The Gucci group really said it all, Tom Ford, creative director and Domenico de sole, president and CEO, stood side by side facing the camera with eyes of steel. These two men had, in the first six months of 1999, been the centerpiece of one of most higly contested hostile takeover battles ever seen on the Europian continent, LVMH Moet Hennessey Louis Vuitton (France) acquired a large interest in the Gucci Group (Italy and Netherlands) in January 1990. Gucci accused LVMH of undertaking a "creeping acquisition" and refused to cooperate in LVMH's efforts to gain representation in Gucci's management. The case details the actions of the purported takeover attempt, and the defense mechanisms employed by Gucci. The defenses employed included the use of a poison pill and a white knight. Ultimately, Gucci found a white knight, Pinault-Printemps-Redoute (PPR) of France to save it from LVMH's unwanted advances. The primary question, which the case addresses, is whether the actions taken by Gucci's management in defending its independence were actually in the best interests of shareholders.
I. STATEMENT OF OBJECTIVE * To resolve the conflict between LVMH and Gucci * To know whether the actions taken by Gucci's management in defending its independence were actually in the best interests of shareholders. * To save Gucci from LVMH unwanted advances.
II. CENTRAL PROBLEM What is the best way to resolve the conflict between Gucci and LVMH?
III. AREAS OF CONSIDERATION (SWOT ANALYSIS)
• Well managed
• Good product