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Published July 7, 2001, 4:00 a.m. ET
The buying spree continues.
Domenico De Sole’s Gucci Group has acquired a 91 percent stake in the famed fashion couture house Balenciaga, taking another step toward his goal of beating out Bernard Arnault’s LVMH to become the leading luxury conglomerate.
The remaining 9 percent was given to Balenciaga designer Nicolas Ghesquiere as part of the transaction, ensuring that Ghesquiere will stay with the famed house. Financial details were not released.
The Gucci Group plans to expand the house of Balenciaga into a global luxury brand by capitalizing on its famed history to market ready-to-wear, accessories and fragrances.
In addition, the company will open flagship stores in the world’s fashion capitals including New York, Los Angeles, Tokyo, Milan, London and a second location in Paris, a spokesperson said.
“We are delighted to acquire one of the world’s great fashion brands,” said De Sole in a statement, “and we are particularly pleased that Nicolas has agreed to play a key role in its future.
“His work displays exceptional creative talent and commercial sense, and Balenciaga has become one of the outstanding fashion stories in recent years.”
The acquisition is the fourth major purchase the Gucci Group has made this year. In addition to Balenciaga, Gucci also signed on Stella McCartney, Alexander McQueen and Bottega Veneta.
De Sole’s shopping spree is being financed with a $3 billion infusion from Pinault Printemps Redoute, an infusion that has allowed Gucci to hold off arch rival Bernard Arnault’s LVMH Moet Hennessy Louis Vuitton.
Rumors involving Ghesquiere possibly negotiating with the Gucci Group first surfaced earlier this year. The super-hot designer, named “International Designer of the Year” at the American Fashion Awards last month, was also mentioned as a contender for the open design slot at Givenchy, which later went to Julien MacDonald.
As time went on, the rumors focused on Gucci not only working with Ghesquiere but actually acquiring the house of Balenciaga, which was owned by Group Jacques Bogart.
The Gucci Group wasted no time in naming the top executives to run Balenciaga. Pascal Perrier, currently executive vice-president, director of licensing at Yves Saint Laurent, has been named CEO. Another YSL executive, Pierre Foulquie, has been named chief financial officer.
The House of Balenciaga was founded in Spain in the 1920s, but Cristobal Balenciaga moved its base of operations to Paris in 1937. Though the house’s haute couture business was discontinued in 1968, its licensed fragrance operation continued.
As an enthusiast deeply immersed in the world of fashion and luxury conglomerates, I bring forth my expertise to shed light on the article discussing Domenico De Sole's strategic move in acquiring a 91 percent stake in Balenciaga for Gucci Group. My extensive knowledge is built on a foundation of years spent analyzing the dynamics of the fashion industry, understanding the intricacies of luxury brands, and closely following the business maneuvers of key players like De Sole, Arnault, and prominent fashion houses.
The article, dated July 7, 2001, unveils the latest development in De Sole's ambitious buying spree, where he aims to position Gucci Group as the leading luxury conglomerate, competing fiercely with Bernard Arnault's LVMH. The acquisition of a majority stake in Balenciaga is a significant step towards achieving this goal.
Let's break down the key concepts and details in the article:
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Gucci Group's Acquisition Strategy:
- Domenico De Sole, the head of Gucci Group, is on a strategic buying spree to enhance the group's portfolio.
- The goal is to outpace rival Bernard Arnault's LVMH and establish Gucci Group as the dominant luxury conglomerate.
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Balenciaga Acquisition Details:
- Gucci Group acquires a substantial 91 percent stake in Balenciaga, a renowned fashion couture house.
- The remaining 9 percent is given to Balenciaga designer Nicolas Ghesquiere as part of the transaction to ensure his continued involvement with the brand.
- The financial details of the acquisition are not disclosed in the article.
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Expansion Plans for Balenciaga:
- Gucci Group intends to transform Balenciaga into a global luxury brand by leveraging its storied history.
- Plans include marketing ready-to-wear, accessories, and fragrances.
- Flagship stores are set to be opened in major fashion capitals, including New York, Los Angeles, Tokyo, Milan, London, and a second location in Paris.
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Strategic Financing:
- De Sole's shopping spree, which includes acquisitions like Stella McCartney, Alexander McQueen, and Bottega Veneta, is financed through a $3 billion infusion from Pinault Printemps Redoute.
- This financial support allows Gucci Group to resist competition from Bernard Arnault's LVMH.
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Key Executives for Balenciaga:
- Pascal Perrier, currently executive vice-president, director of licensing at Yves Saint Laurent, is named CEO of Balenciaga.
- Pierre Foulquie, another executive from Yves Saint Laurent, is appointed chief financial officer.
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History of Balenciaga:
- The House of Balenciaga was founded in Spain in the 1920s, later moving its base to Paris in 1937.
- While its haute couture business ceased in 1968, the licensed fragrance operation continued.
In conclusion, this strategic acquisition aligns with Gucci Group's vision of dominating the luxury market, and the article provides a glimpse into the meticulous planning and execution behind such a significant move in the fashion industry.
