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Gucci Duo To Quit Next Year

By FashionUnited

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The masterminds behind Gucci left the Italian fashion house in turmoil last night, after the two men who single-handedly changed the company from an almost bankrupt family firm to a luxury empire, said they will quit when their contracts expire next year.

Domenico de Sole, the chief executive, and Tom Ford, the designer, announced their decision after failing to agree new contracts with Gucci's French majority shareholder, Pinault Printemps Redoute (PPR).

A Gucci spokesman said that Mr Ford, 42, and Mr De Sole, 59, who transformed the moribund label with annual sales of £120 million into a £1.8 billion luxury conglomerate, will leave on 30 April.

The decision by the pair, dubbed the most powerful duo in fashion, ends months of speculation that has focused the attention of followers, from buyers to the trading desks of New York and London, over who should control the company. PPR, which owns 68 per cent of Gucci and has pledged to buy the rest by next spring, insists on exerting management control.

But Mr De Sole and Mr Ford argue that after all they have done for the fashion house, they should retain managerial independence from PPR, which is based in Paris and controlled by the French tycoon François Pinault. According to sources, compensation requirements were the last sticking points in the negotiations. Mr De Sole was paid £1.8 million in Gucci's last financial year, while Mr Ford was paid about £4 million.

The departure leaves the fashion house rudderless at a time when the fashion sector is picking up. Claire Kent, a luxury goods analyst at Morgan Stanley, in London, said: "We think the likelihood of PPR easily finding a designer who can interpret the sensibility of the Gucci and YSL brands in the way consumers appreciate is low." The drama at Gucci highlights a serious shortcoming in the fashion world: a dearth of creative talent that can excite consumers.

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