Tragedy at the House of Gucci

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(Last of a series)

The house of Gucci started in Florence in the 1920s, and grew under the steady influence of founder Guccio Gucci. His son, Aldo, brought the brand to New York in the 1950s, fueling growth for two decades. But as we saw last week, the family business was wracked by internal strife.

So in the 1980s, grandson Maurizio brought in professional management. Sara Gay Forden, in her book “The House of Gucci,” described Maurizio as turning on the charm for finance house Investcorp, which took a stake in the company.

Maurizio told Investcorp, “There is a saying in Italy: The first generation creates the idea, the second develops it, the third must face the big growth questions. How can you tie a company that has 240 billion lire in sales to a closed family mentality? I believe in tradition, but as a base on which to build, not as an archaeological collection to show to tourists. The family war has paralyzed this company for years. How many competing labels have been born and reached success just because Gucci was standing still? Now it is time to turn the page!”

However, chaos already reigned. Employees were confused by contradictory messages, often from Maurizio himself.

Once, he ordered employees to throw away old but unused products, but they did not listen and found a new market for these. “On the one hand, big money would be thrown away,” a manager told Forden, “and on the other, we were instructed to save on pencils and erasers, our telephone calls were monitored, and we had to burn out all the lights by 5 p.m.”The situation was like “the Titanic sinking and [passengers] having champagne and caviar,” said a board member.

In the 1990s, in a bid to revitalize the business, Maurizio imported American designer Tom Ford. Ford, in tandem with company CEO Domenico De Sole, put Gucci back on the fashion map.

De Sole the lawyer had decades ago led second-generation Rodolfo’s fight against his brother Aldo, then Aldo’s fight against his son Paolo, followed by Maurizio’s fight against Aldo and his cousins, and later on Investcorp’s fight against Maurizio. After Maurizio’s demise, De Sole landed the top post, thereby ending Gucci leadership at the family business. De Sole and Ford would later convince French billionaire Francois Pinault to help them fend off a takeover by LVMH’s Bernard Arnault.

Maurizio tried his best to revive the family business, but childhood scars took their toll. “Maurizio had heard both his father and his uncle say over and over that he wasn’t capable of managing the company,” banker Andrea Morante told Forden. “He carried this fear around with him. He wanted to hear people say, ‘You are a genius.’ You were either for him or against him.”

Maurizio’s biggest error though was in marriage.

“When you are healthy, handsome, and have a highly visible last name and the most beautiful boat in the world, it is difficult to make real friends,” said Morante. “You find yourself surrounded by people in desperate search for the indirect limelight, for easy money, and for the glamor of being associated with a well-known name.”

Against his father’s wishes, Maurizio married Patrizia Reggiani in 1973 and the couple had two daughters. A decade later, he left her for another woman. The couple divorced in 1991. Four years later, Maurizio was gunned down in his office, and in 1998, Patrizia was found guilty of orchestrating his murder. She was released from prison in 2016.

Gucci’s longtime watch supplier Severin Wunderman said it best: “The Gucci story is the perfect example of what a family should not do.”

Queena N. Lee-Chua is on the Board of Directors of Ateneo’s Family Business Center. Get her book “All in the Family Business” at Lazada and as ebook on Amazon, Google Books, Apple Books. Contact the author at [email protected]

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Gucci Is Staying in Trump Tower

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Four days after receiving a detailed list of questions about the deal, a representative for Gucci called to say that a statement was on its way within the hour. A little more than an hour later, the representative called back to say the statement would not actually be arriving after all.

The Trump Organization did not respond to two requests for comment.

One possible reason: According to the person who has seen the new lease, Gucci required people at the Trump Organization to sign confidentiality agreements regarding its terms.

Still, the deal was worth it to the Trumps for reasons that extend beyond symbolism.

Numerous luxury brands occupying prime Manhattan retail spaces have renegotiated leases during the coronavirus pandemic as foot traffic dropped off. Others have simply subleased their spaces. That was what Ralph Lauren did at its Fifth Avenue location last November, renting 28,300 square feet to the fast fashion retailer Mango for what the Real Deal reported was $5 million — which is $22 million less than Ralph Lauren pays for it.

In recent years, revenue from “The Apprentice,” Mr. Trump’s former reality show on NBC, dried up. Debt payments across the Trump business are coming due. That has turned the retail space in and around Trump Tower into a lifeline, becoming what Susanne Craig and Russ Buettner wrote in The New York Times last January is likely his empire’s most dependable and “greatest long-term money producer.”

Paramount Sets 45-Day Release Window

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ViacomCBS has announced major plans for their Paramount+ service which kicks off next week with the CBS All Access app being rebranded.

The biggest announcement is that unlike WarnerMedia with their day-and-date plan for HBO Max, ViacomCBS will not be breaking the theatrical window. However, they are definitely shrinking it and confirm that “Mission: Impossible 7,” “A Quiet Place Part II,” “Creed III,” “House of Gucci” and “Paw Patrol: The Movie” all coming to Paramount+ approximately 45 days after their big-screen runs – much shorter than the usual 90 days to VOD and 6-12 months to SVOD pre-pandemic schedule.

Thanks to a new expansion deal with MGM-owned Epix, around 2,500 movies from MGM’s library will reside on Paramount+ including 700 titles from Miramax Films. That deal also includes the upcoming James Bond film “No Time to Die,” which will make its streaming home on Paramount+ after its theatrical run, and titles from some other studios as well.

As part of that deal, Epix will get a 90-day exclusive pay TV window for many Paramount theatrical titles before those titles become available on Paramount+ and Epix.

In addition, previously reported on new installments in the “Paranormal Activity” and “Pet Sematary” franchises will head directly for the Paramount+ service as opposed to going theatrical. Supernatural thriller “The In Between” is also going to the streamer.

Paramount+ launches on March 4.

Source: Paramount+

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