The ice cream man cometh

Perhaps the biggest shock in the history of luxury brands.

Pinault Printemps-Redoute (PPR), the French conglomerate that had taken control of the Gucci Group two years earlier, announced in 2003 that it had been unable to agree new contracts with Tom Ford, Gucci's creative director, and Domenico De Sole, its chief executive.

De Sole had negotiated for both himself and Ford. His case was simple: we have made you billions and you cannot live without us. Give us control or we leave and Gucci will struggle. The fashion world agreed. 'It would be a catastrophe,' said Vogue editor Anna Wintour. Claire Kent, Morgan Stanley's luxury goods analyst, was even more blunt: 'The intrinsic value of Gucci is difficult to evaluate if the current management leaves.'

The frenzied negotiations faltered over how much autonomy Ford and De Sole would retain after Gucci became a fully owned unit of PPR and the dream team left. Even more surprising news was to follow with the announcement of their replacement. Robert Polet became the new chief executive of the Gucci Group. Incredibly, the 49-year-old Dutchman had no experience in luxury goods, having spent the previous 26 years at Unilever - most recently managing its ice cream business. The world of luxury was stunned: De Sole and Ford were being replaced by an unknown ice cream salesman from Holland. Women's Wear Daily gave a sarcastic summary of the situation: 'What do frozen fish and ice cream have to do with $8000 crocodile handbags?'

Polet told his wife that he would not be joining her on vacation in 2004. Instead, he spent the next month travelling around his new empire. He delved into 80 years of Gucci archives and began to plot the future for the great house. After visiting 168 stores and talking to more than 2500 staff, Polet returned to his London office confident that most of the principles he had learned at Unilever equally applied to his new role. At the time he was perhaps the only person who thought so.

Early reports from insiders within Gucci suggested an impeding disaster. Polet shocked his team at an initial meeting when he expressed his admiration for Zara and challenged the group to learn from the Spanish retailer. Worse was to follow when he brought in management consultants Bain & Co to analyse Gucci's internal operations. Bain's report, which concluded that Gucci's eight-month production cycle was unnecessarily long, was too much for senior executive Giacomo Santucci, who reportedly stormed out of the meeting unable to accept instruction on luxury from outsiders. Despite the resistance, Polet unveiled a three-year plan to double sales at Gucci and stem losses elsewhere, most notably at the group's ailing Yves Saint Laurent label.

Polet also challenged the traditional notion that customer orientation had no place in luxury goods. He commissioned regular research briefings and set up an international focus group panel of 600 Gucci consumers. When challenged, Polet cited founder Guccio Gucci and the customer-centric approach he had used to build his small business back in the 20s. 'The whole organisation has to be outward focused, including with customers. We need to know how they want it and when,' concluded Polet.

Three years on and, against almost everyone's expectations, Polet has pulled it off. Profits and sales targets have been exceeded and, according to Millward Brown Optimor's Brandz valuation, Gucci's brand value rose an astonishing 49% in 2006 while many of the smaller brands in the group, such as Boucheron and Bottega Veneto, are growing rapidly. The ice cream man has done the business and in doing so has changed not only Gucci, but also the way that luxury brands are managed.
What do frozen fish and ice cream have to do with $8000 crocodile handbags? A lot more than you might think.