Gucci - The Rise and Fall...And Rise Again

this video is sponsored by incogni it's a great service that'll help protect your privacy by taking your personal data off the market all you have to do is go to incognit.com companyman and the first 100 people to use the code companyman will get 20 off the link is in the description [Music] holy cow this right here has to be one of the wildest most dramatic comeback stories in business history today can we all agree that gucci is among the biggest names in luxury fashion in 2020 forbes ranked them as the world's 31st most valuable brand being worth 22.6 billion dollars it is easily one of the most mentioned brands in rap songs for similar reasons and for heaven's sake people use the word gucci to describe anything that's fancy or fashionable which has to be one of the biggest honors for a higher-end brand like this they go back over 100 years and for most of that time they have been a respected desired and overall strong brand with one major exception in the 1980s well into the 1990s i think we can say that gucci was in trouble there was so much scandal and mismanagement happening that they were getting close to bankruptcy i mean their sales were falling they were losing money and their reputation was suffering to a point where many people didn't even want to be seen wearing their products anymore gucci was so much different than when compared to today which is why i'm labeling this as such a dramatic comeback story so for this video i want to talk about how they got big in the first place how everything went so bad and how they've recovered from it that famous gucci logo i think we've all seen it those two g's put together is meant to represent the initials of the company's founder who had the unusual name of guccio gucci he is originally from florence italy but as a teenager just before the turn of the century he moved to london where he worked at a low-level job at a fancy hotel where he would commonly encounter higher-end luggage of the customers by observing these customers it is believed that this right here is where he learned the value of exclusiveness those wealthy customers owned expensive bags not just for the quality but because it made them special it was something that couldn't be obtained by just anybody so having it i guess you could say separated them into a more selective group from there he served in world war one returned back home to florence where he eventually got a job with a company that made higher end leather products went to rome to open and operate one of their new stores and finally returned back to florence in 1921 and used everything he had learned to start his own leather company he opened a store to sell leather goods that were made by others and under his own brand and from very early on he was successful by using the principles of quality and exclusiveness however it may not have been the best timing it opened just before mussolini took control of the country which of course led into world war ii economic sanctions led to leather shortages which actually may have helped things in that it caused them to add new product lines using new materials like bamboo and canvas now guccio gucci was the founder and the driving force behind the company for the first few decades through some uncertain times in italy but it was actually his children and grandchildren that were much more responsible for expanding and then collapsing the brand guccio had a son named aldo who started working at the store early on doing small tasks as a 20 year old but became increasingly more involved it appears that he was always trying to convince his father to grow the business by opening new stores in new cities but guccio was always very hesitant about it well in 1938 after 17 years they finally expanded outside of florence when aldo was put in charge of opening and operating their new store in rome when guccio died in 1953 aldo and his two brothers became equal owners of the company but aldo was put in charge of foreign operations and over the next couple of decades successfully made gucci an international brand within the first year he opened the first gucci store in the united states in new york city and by the 1980s there were gucci stores in major cities across the rest of the country and the rest of the world some notable gucci products to help them gain popularity included their famous loafers a bag with a bamboo handle their watches the scarf with a floral pattern on it they were putting out trendy original clothing and accessories that were commonly worn by many of the biggest celebrities of the time they had caught on as one of the biggest names in fashion and then everything changed there was so much happening around this time so i've put together a list of what i believe to be the most significant reasons behind their trouble first off the name gucci became deluded maybe one of the worst things that could happen to a luxury brand like this because so much of their value is based on their reputation well here it was being sold in stores all over the place including many gucci stores that were not owned by gucci but rather franchised by individuals from outside the company and on top of that many gucci branded products were not actually made by gucci they were made by other companies that would simply pay gucci a licensing fee to put their name on their product and there's nothing inherently wrong with any of that but you have to be strict about it their name was on products that weren't even being made very well being sold in stores that weren't very fancy or were treating their customers poorly remember going back to that london hotel in the 1800s guccio gucci realized the importance of quality and exclusiveness i have to think that his fear of losing that was a big reason that he wanted to keep things small and tightly controlled and now look at what was happening i believe it was just being gradually more careless and negligent in the beginning it's hard to maintain the same level of control when something gets so much bigger but after a while it became a quick way to try to recover their sales essentially sacrificing long-term value of the brand for some fast money another reason behind their fall has to do with the competition it's simple enough competing luxury brands like louis vuitton and prada were not making these same mistakes and taking away their market share because of it since the customers had plenty to choose from they were simply able to move over to a much more reputable brand another potential reason behind the fall would be some extravagant spending see by this time guccio's grandson maurizio was in control of the company and he and his wife patrizia were famously known for their extravagant lifestyle maybe best exemplified by his decision to move the company's headquarters to this expensive building in mulan but maybe the craziest example is when patrizia said in an interview that it's better to cry in a rolls-royce than to be happy on a bicycle one of the silliest sentences i've ever heard and it gets so much crazier my final reason behind the fall of gucci is the feuding that was happening within the family i don't want to get too deep into it because it's already been talked about extensively but just a few of the highlights in 1982 paolo gucci one of the grandsons brought a tape recorder into one of the board meetings with the intention of recording it i don't think anyone outside the room knows exactly what happened but accounts say that he was attacked with ashtrays and with the tape recorder itself it may have led to a concussion so he then sued the members of his family over it where he claimed they willfully and maliciously assaulted battered and beat me using their hands fists and various objects another incident would be in 1986 when aldo gucci was sentenced to a year in prison for evading seven million dollars in american income taxes he was 81 years old at the time and it was actually his son that informed the irs about it but the biggest one was in 1995 when maurizio gucci who was guccio's grandson and former head of the company the extravagant one was killed by a hitman that was later learned to have been hired by his former wife patrizia where she was sentenced to 29 years in prison but released after only 18. again so much that can be said about all of this but i just want to convey that this was a wild family that did not get along all of these crimes and lawsuits were costly distracting and building a negative public image around the brand it's becoming clear why people didn't want to wear gucci anymore but amazingly in a short time they were able to completely reverse that trend the name gucci meant something completely different in the beginning of the 1990s when compared to the end of the 1990s so now i have a new much happier list that outlines how they fixed everything obviously the gucci family was hurting things at this point so it was very good news when they sold the company in 1993. actually originally they had sold half of it five years earlier to an investment firm from the middle east called invest corp but here they sold the rest of it completely ending the control of any member of the gucci family and then about two years later invest corp sold gucci to the public through multiple stock offerings making a ton of money in the process their initial investment was under 300 million dollars and they sold it for more than 2 billion showing how quickly everything recovered my second reason is the new ceo that was put in charge named domenico desole he had actually been a lawyer for the gucci family during some of those legal battles and had been put in charge of their american operations and now he was put in charge of everything and one of his first major decisions was to promote tom ford to creative director of gucci that's my third reason and i'm sure that anyone who follows fashion to any degree knows all about tom ford but to keep it simple he is creatively the biggest reason behind this turnaround he is responsible for all of these lines of clothing many of which were provocative that helped make the brand cool again all the celebrities started wearing his stuff at the award shows on the red carpet and the name gucci once again became associated with all of these cool and trendy designs that people wanted to wear and this is where everything started working together once the product was good domenico set out to re-concentrate the brand he spent millions of dollars buying stores that were owned by franchisees and pulling their products out of many third-party retailers along the same lines they ended many of their licensing agreements or even bought the company that sold the license essentially gaining better control of things to get back to the principles of exclusiveness and quality that they had strayed away from another big part of their turnaround was advertising as soon as they started making a profit domenico felt that it was important to reinvest a lot of that money into their ad campaigns everything about gucci was looking so much stronger now so you might as well let everyone know about it and tom ford came up with some risky effective campaigns some of which are so explicit i can't even show them on here and finally the other big part of the turnaround was acquisitions growing the company overall by obtaining various products and brands i'm talking about brands like yves san laurent and sergio rossi both bought by gucci in 1999 along with many others to follow so that's about it gucci has returned into a mega popular fashion brand and those are some of the main ways they've done it in 1999 lenny kravitz described his bedroom as very gucci in the first documented occurrence of someone using it as a slang term and i think that's a good way to gauge that they had officially made their comeback to quickly finish things up by 1999 a competitor who owned the brand louis vuitton had obtained 34 ownership of gucci so in a complex defensive move to avoid a takeover gucci sold 40 percent of their company to a french corporation that is now known as caring spelled in a weird way that has since increased their ownership to nearly one hundred percent also in 2004 both domenico de soul and tom ford left gucci ford was replaced by a group of people that he had been working with mainly frida giannini who was replaced in 2015 by alessandro michelle it was following a few years of lower sales and the creative direction of michelle is commonly credited with helping the brand in a much less dramatic turnaround let me know in the comments do you agree with patricia it's better to cry in rolls-royce than to be happy in on a bicycle that's this for sure i'm just caught up on that statement i i don't get how it makes any sense but more importantly how do you feel about gucci is it overrated does it live up to its reputation or has your perception of it changed over the years i know that fashion is always changing so it can be hard to keep up with it's definitely a crazy story though with just about everything you can imagine so any thoughts you have about gucci whether it's the brand the family or the company leave them in the comments i'd like to hear what you have to say today's sponsor is incognit see you may not even realize it but there are potentially thousands of companies out there that have collected your personal data i'm talking about your address your phone number your employment history and things you wouldn't even imagine there is an entire industry built around brokering personal information for example when you do something simple like register for a store loyalty card your private information might be exposed it can lead to annoying spam email phone calls and even worse that's how easy it can happen and nobody wants that but what can you do about it reach out to all these data brokers and request that they remove your information 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Channel: Company Man

Views: 164,010

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Id: MYeVTrebANA

Length: 12min 47sec (767 seconds)

Published: Wed Jun 22 2022