Italian fashion house Gucci denies ousting CEO

Wed Sep 17, 2008 10:14am EDT
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By Astrid Wendlandt

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.   Continued...