Will Gucci's Shakeup Affect Other Fashion Houses?

It has been published widely that the big multibrand conglomerates are all facing similar problems as each relies largely on a single brand: LVMH on Louis Vuitton, Gucci on Gucci, and Richemont of Switzerland on the jeweler Cartier.

While Vuitton and Gucci have been the powerhouses of their respective parents, much of the cash they generate is burned up by less successful labels, like LVMH's Fendi and Yves Saint Laurent at Gucci. With Cartier ailing, growth at Richemont virtually collapsed this year.

The announcement that Tom Ford and Domenico De Sole will be leaving Gucci at the end of April seems like nothing but good news for Bernard Arnault, the chairman of LVMH Moët Hennessy Louis Vuitton, Gucci's archrival in the luxury goods market. But some people in the fashion business say that Mr. Arnault and LVMH should enjoy the good news while it lasts. The entire luxury goods sector and not just Gucci, they argue, is facing profound changes that could change the way the industry does business.

You would think, too, that fashion houses like Gucci live in part from intangibles, like the creative flair of the designers who drive them. People like to see a face with the brand: Marc Jacobs at Louis Vuitton, for example, or Miuccia Prada at Prada. Rarely was the front of house role fulfilled as successfully at a design house, as that of Mr. Ford, who took over Gucci with Mr. De Sole in the 1990's when the fabled Florentine fashion house was on the ropes.

With Mr. Ford reviving Gucci's flair, and Mr. De Sole its marketing machinery, the two transformed Gucci from a luxury goods has-been to the hot item of the late 1990's. Now the questions remains, is the brand strong enough to survive on its own? With economies recovering and tourism becoming popular again, the bleak future we saw a few years ago no longer holds true. For some fashion houses, however, recovery will trickier than others. Especially when their signature gets blurred.