Italian fashion house Gucci denies ousting CEO
PARIS (Reuters) - Italian fashion house Gucci on Wednesday said the sudden departure of chief executive Mark Lee had nothing to do with lackluster first-half results.
Gucci Group, parent company of the Gucci brand, surprised investors late on Tuesday by announcing that Lee would resign at the end of the year, after more than 12 years with the group, "to pursue other interests".
"His departure has absolutely nothing to do with Gucci's results," a spokeswoman for Gucci Group said. "It was Mark's decision not to renew his contract, she said, adding that he wished to spend more time in New York.
Some analysts, however, linked Lee's departure to the company's performance.
Armel Coville at Oddo Securities said: "It was presented like a resignation but in 2008 the Gucci brand suffered a slowdown and it has not performed as well as other brands such as Louis Vuitton and Hermes."
Lee, who was chief executive of Gucci since 2004, would be replaced by Patrizio di Marco, the current head of Bottega Veneta, another fashion house part of the Gucci Group, itself owned by Paris-listed retailer PPR.
Late last month, Gucci said operating margins had not progressed year on year in the first half, remaining at 28 percent and sales stayed flat at 1.017 billion euros ($1.44 billion) in the six months to June 30.
The luxury brand, known for its fine watches and "GG" embossed handbags, was hit by supply disruptions in the first quarter but it said in late August it has now sorted them out.
The Italian fashion house contributed 95 percent of the Gucci Group's recurring operating profits in the first half and 39 percent of PPR's total recurring operating profits and it now accounts for just under 40 percent of PPR's market valuation.
"This move (Lee's departure) could therefore be seen as a decision by the group to step up its efforts to reinvigorate the brand," Boris Bourdet, analyst at Natixis Securities said in a note.
Bourdet added he expected di Marco's appointment to go down well with investors.
PPR shares did not move much at the opening on Wednesday but fell later more than 3 percent, pulled down by the wider European stock market suffering from a global financial crisis.
By 1350 GMT, PPR was down 2.6 percent at 69.70 euros.
Di Marco, who will head the Gucci brand of as January, joined the Gucci group in 2001 to head Bottega Veneta. Until then, he was senior vice president of marketing and communication at Louis Vuitton Americas and head of Celine.
He will be replaced at Bottega Veneta by Marco Bizzarri, now president and chief executive of Stella McCartney.
Gucci Group, which also owns fashion house Yves Saint Laurent whose founder died in June this year, said on Tuesday the new head of Stella McCartney would be announced shortly.
Robert Polet, head of the Gucci group said in a statement: "Whilst we regret seeing one of our greatest professionals step down we are enabling our best people to continue their career path within Gucci Group."
(Editing by Louise Ireland; Editing by Erica Billingham)
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