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Luxury Fashion Executive Domenico De Sole Domenico De Sole is chairman of Tom Ford International, the menswear brand that now includes beauty, accessories, fragrance and footwear. He is a lawyer by training, but made the transition to the fashion business when Gucci one of his clients hired him to join the company. That was in 1984. Over the next 20 years until his departure from Gucci in 2004, he engineered a remarkable turnaround, saving the company from hostile suitors and acquiring such key brands as Yves Saint Laurent and Alexander McQueen. Indeed, in the fashion world, the standard phrase for managing a successful turnaround has become a Gucci. An edited transcript of the conversation follows. They have been through an obviously huge crisis last fall that is continuing. I have been in the business a long time, and I have never seen anything that was so deep and so worldwide. Asia is still working reasonably well, China is still growing, Hong Kong is still growing, but every other country has had very difficult times. Business has been very, very weak. There are a lot of factors obviously the general economic situation [is one]. Japan economy has been very difficult for a long time now, and this year particularly [so]. I was in Japan last week and it was all over the press that exports in Japan have declined 46% in the last quarter. So you can imagine how [hard] it is for the economy. Domenico De Sole, chairman of Tom Ford International, shares his perspective on the fashion business in a down economy In the United States, it is a combination of factors impacting the luxury industry. The first one is certainly the general economic situation, the financial meltdown of this fall, but on top of that there is another factor occurring in the United States. At the beginning of November last year, one department store in particular that carries a lot of luxury brands suddenly went on sale. A very radical approach. Marking Moncler Padded Jacket everything down 70%. This created a very complex situation because the whole fashion business and all the great luxury companies have stores in New York, so we were confronted with a very complicated situation. Some followed the lead and marked down products in a way which was really unprecedented. Obviously it very difficult to tell your consumers now that, in the spring season, products are full price, that they are supposed to buy [at] full price, something they were giving away three months ago. So I think in the United States there is an added factor that is creating a difficult time for luxury brands. But business is difficult everywhere, as I said, with the exception of China and Hong Kong. Korea actually is doing reasonably well because the won has depreciated so there are a lot of tourists who go to Korea to buy luxury goods. But by and large, it a very difficult climate. Fashion Moncler Down Coats With Zip Women Dark Blue I sense, and actually I believe, that 2009 is going to be a very, very difficult year. I doubt that there going to be a recovery [in 2009]. And I think we probably will continue to have difficult times in 2010 with the situation improving towards the end of 2010/2011. So I have a rather realistic I wouldn say pessimistic view. However, there are really a lot of schools of thought about the long term. I been around for a long time and I always have always heard after horrible situations like economic depressions or events like 9/11 I always heard: have changed forever. I just don believe it. I think that consumers people forget. It human nature. People are optimistic most of them by nature. So I am convinced that obviously we will do quite well. The luxury industry will come back. The real question that nobody knows [the answer to] is how long it going to take. Nobody knows. My guess is that it going to take some time. But long term, I quite optimistic. Watch your costs very aggressively. But, at the time same, stay the course with the brand. Discounting prices really doesn make a lot of sense. At the end of the day, it is imperative for luxury companies to deliver good value. It doesn mean the price has to be lower. Just make sure that whatever is delivered is a good value great quality, great fashion, great brand The savviest people know that the number one [strategy] is to stay the course. law firm to becoming CEO of Gucci, that quite a switch. Why did you make that move, and why do you think it worked so well over that 20 year time span? De Sole: First of all, the move was really by chance. I was representing one side of the Gucci family. The company had a huge tax problem at some point back in the early 1980s. Some [family members] asked me to become president of Gucci America to help them resolve the tax issues, which I did. In the meantime, the American company had a lot of problems. So I fixed the problems and stayed there. The company did quite well, actually. When the last family member took over the company, unfortunately, he was not the best manager. In 1994, the old group went bankrupt stopped paying employees so the shareholders at the time, a private equity company, purchased the shares of Maurizio Gucci. The other members of the family asked me in 1994 to move from the United States to Italy where I became the CEO of Gucci Group. That [just] happened to me. There was no planning there. In fact, [at one point] in 1994, I considered going back to be a lawyer until I got a phone call and I was asked to move to Italy to see if I could fix the company. wondering what those practices were and how you implemented them. De Sole: I would say that has been defined very simply. The company was broke in 1994. So I had a pretty good understanding of the company problems. I just parachuted into a situation which was catastrophic. But by the same token, I recognized Online Moncler Outlet that there were a lot of very competent people, and I thought that I turned out to be a good leader. I rallied them and made sure that everybody understood the direction we were going. I always was able to deal with people well. I came from a culture also in which I recognized talent, so I not afraid of surrounding myself with competent people. And most important, I was very lucky because the other survivor who was there as the company was collapsing was Tom Ford. They wanted to fire Tom Ford, but I thought that was really stupid. I thought Tom Ford was quite good. De Sole: As a designer. I said, I think this guy is great So I convinced Tom to stay to become creative director of the company. It was a brilliant decision because Tom turned out to be probably the great designer of the last 50 years. And we work well together. But not only with him. We had a great team. There was this great sense of urgency, and so everything worked out well. In fact, when I arrived in Florence from the United States after leaving Gucci America to take over the company, the CFO of InvestCorp, which was the owner of Gucci at the time, welcomed me in Florence. We were in the cafeteria and he said: I hope you can do something here because Gucci is an albatross around our neck. Less than two years later, they sold the company and made $2 billion in profit. I know that you and Tom Ford bring different strengths to the current partnership at Tom Ford International, but that aside, what makes the relationship between the two of you work so well? De Sole: First of all, there a great relationship of trust in the sense that I trust Tom 1,000% and I think he trusts me 1,000%. The second thing I think is that we have very deep respect. Tom is a creative genius. Also, I really do believe that in life, to be successful, you have to have knowledge of two important things: one, what you know, and two, what you don know. I totally aware that I not a creative person. I understand a collection. I can tell you if it going to sell, or not going to sell. I do very well with that. But I not a creative person. I wouldn know how to do it. I have a great immense respect for Tom and his expertise. So there is a very clear definition of roles. Also, I have to tell you that I really have an extraordinary admiration for Tom. You see, as a businessman, you can learn about merchandise. You can learn about stores. You can learn to understand what is a good product, what is a bad product, what is a good fashion show, what is not a good fashion show. However, being creative is a totally different universe. I think creative people can see things that normal human beings cannot. So, and always, most importantly, I treat Tom with immense respect Businessmen are a dime a dozen. Creative people are truly extraordinary. It was started a long time ago with celebrities being dressed by designers. That [phenomenon] has become very popular, [helped] by all sorts of gossip magazines [covering] who wearing what, when. It has been spread [even more] by the Internet. So it has become much more prominent and important. Not only do we have a great designer who can design beautiful clothes and wonderful accessories [but we have someone] with an amazing eye and amazing marketing ability. He done some of the greatest campaigns. I still buy old fashioned magazines just to look at the ads. It amazing to me how many people now are redoing what we were doing with Tom in1994 and1995. Tom was really avant guard. De Sole: Yes and no. At the end of the day, it is very, very important to be very disciplined with everything you do. I think that can always be controlled. I think it up to the management of any brand to make sure that the image of the brand is always controlled.