The House of Gucci

by Sara G Forden

  Aldo hired Lina Rossellini, the wife of Renzo Rossellini, the brother of film director Roberto Rossellini, as a VIP hostess in his belief that personal contact was the best advertising for Gucci. Mrs. Rossellini, as she was always referred to, was well connected socially in New York and always welcomed important customers to the Galleria. She graciously ushered them over to soft taupe couches and easy chairs where white-gloved waiters served coffee or champagne on travertine marble tables. There they could admire originals by De Chirico, Modigliani, van Gogh, and Gauguin, among paintings by other artists, and choose limited-edition Gucci-designed jewelry or handbags made of precious skins and featuring 18-karat-gold hardware priced from $3,000 to $12,000.

  “You may ask, where are the people to buy these things in time of recession?” Aldo said to Women’s Wear Daily the eve of the opening. “I have a saying about beautiful women,” Aldo continued, answering his own question. “Only 5 percent are truly beautiful. And it’s the same with people of great possibility. They are only 5 percent of the population. But 5 percent is enough to make us smile.” He predicted that the Gucci U.S. business would hit $55 to $60 million by the fiscal year ending August 1981.

  One of Paolo’s favorite tasks was personally to hand over to VIP clients Gucci’s gold-plated key—another one of Aldo’s inventions—that granted them access to the “Galleria.” In no time at all, the little gold key—fewer than a thousand were issued—became a must-have in certain New York circles.

  Gucci, by then considered the ultimate in class and style, was imprinted on the American mentality as top-of-the-line chic. In 1978, the characters in Neil Simon’s California Suite all carried Gucci luggage and even mentioned it by name. To set the scene for his 1979 film Manhattan, Woody Allen rolled his cameras in front of Gucci’s gleaming Fifth Avenue windows. Ronald Reagan wore Gucci moccasins while Nancy carried the bamboo bag for everyday use and picked up Gucci’s satin slippers and beaded evening bags for special occasions. Sidney Poitier’s joke went around the world: during a trip to Africa, a journalist asked the actor how it felt to set foot on the soil of his ancestors. With a withering glance he retorted, “Fine, through the soles of my Gucci shoes.” In 1978, gossip columnist Suzy referred to Peter Duchin in the Daily News Sunday as “the Gucci of all society orchestra leaders.” In 1981, Time magazine described the new Volkswagen as a new subcompact four-seater design that “looks more like a Gucci slipper than a car.”

  While Paolo enjoyed his New York life, his uncle had not forgotten his nephew’s campaign against him. Rodolfo resented Aldo’s breezy solution and Paolo’s leaving his Italian post with no notice or replacement. Now that Maurizio was back in Rodolfo’s good graces, the elder Gucci could no longer accept that Paolo had more standing in the company than his own son. In April 1978, Rodolfo wrote a letter in his own hand to Paolo, firing him from the Italian company for failing to carry out his duties at the factory in Florence. The equivalent of a declaration of war on Aldo, the letter showed that Rodolfo felt he had been provoked beyond toleration.

  Paolo received the letter early one morning in New York as he was leaving home to head for the store. Rather than frighten him, it only made him more determined. “If they are going to kill me, I am going to kill them,” he told Jenny. He vowed to destroy Rodolfo’s position in the company through the power his own father wielded. He reckoned that the growing importance of the Gucci Parfums business with the lucrative Gucci Accessories Collection, of which Rodolfo only had 20 percent, would weaken his uncle’s bargaining power.

  The problem was that Paolo didn’t get on much better with his father. While Maurizio humored Aldo, Paolo clashed with him. Working side by side constantly frustrated them both. Aldo was authoritarian and all-encompassing and had his own very clear ideas about how he wanted things done.

  “I wasn’t allowed to do anything,” Paolo complained. “I had no authority.”

  When, for a change, Paolo had handbags stuffed with colored tissue paper instead of white, he incurred Aldo’s wrath: “Don’t you know colors fade? You idiot!” Aldo screamed.

  Or when he sent back goods that had been ordered but arrived late, Aldo fumed, “We’ve been working with these suppliers for years, you can’t treat them like that!”

  They also disagreed over the advertising budget and the catalog because of Aldo’s preference for promoting Gucci by word of mouth. Only Paolo’s window displays, which won recognition, seemed to please Aldo—until Paolo hired the hot young window dresser of the moment and Aldo fired him the first day on the job. Even socially, Aldo was the only Gucci who ranked in New York. Dubbed “The Guru of Gucci” by the press, only Aldo appeared in the whirlwind of fashion-related Gucci benefits.

  Paolo found his father’s tyrannical ways insufferable and wondered what to do. Going back to Florence was out of the question for him. Since he had built up a circle of friends and contacts in New York, he explored the possibility of doing something under his own name. It didn’t take long for his family to get wind of his plans.

  “Aldo, what is that bischero of your son up to?” Rodolfo shouted into the telephone from his office in Scandicci. He had heard from several local suppliers that Paolo had approached them about his own line—the PG collection—and it wasn’t just talk. There were styles, prices, delivery dates. And the distribution plan was massive; he even wanted to sell in supermarkets, according to one report.

  Aldo hung up the phone, livid. Paolo had completely miscalculated his father’s reaction. Instead of siding with him against Rodolfo, Aldo was furious with his own son. Even though Aldo and Rodolfo argued constantly, when it came to protecting the well-being of the company, they were united. They both perceived Paolo as a threat to the Gucci name and all they had achieved. Aldo thumped his fist on his desk, enraged. After all he had done for Paolo, this was his thanks.

  He called Paolo to his offices over the Fifth Avenue store. The premises trembled from his shouting.

  “Bischero! You are fired! You are an idiot to try to compete with us! A fantastic idiot! I cannot protect you anymore.”

  “Why are you letting them kill me?” Paolo shot back. “I only wanted to make the company better, not destroy it! If you fire me I will found my own company and then we will see who is right!”

  He stormed out of the store and called his lawyer, Stuart Speiser. A few days later the papers were filed for the registration of the new trademark: PG.

  It wasn’t long before his own father’s dismissal letter arrived—a registered letter from the board of directors dated September 23, 1980. When Paolo realized that there was no severance provision after twenty-six years with the company, he went to court again, filing papers against the mother company in Italy—which served to convince Rodolfo even more that Paolo was a potent danger. The family convened a board meeting in Florence, to which Paolo was not invited, and authorized some $8 million to fight Paolo’s venture. Giorgio, who had tried to stay out of these family battles, was there, as was Roberto, who felt Paolo had gone too far in wanting to have everything his way. He had tried to reason with his brother: “You can’t be a part of us and be a competitor at the same time. If you want to play, respect the rules of the game. You can’t fight the company and remain inside it. If you want to go your own way, then sell your shares.”

  Paolo resented the pressure against him. “Everybody else was protecting their own interests within the company, I didn’t see why I shouldn’t have pursued my own,” he said.

  Rodolfo made sure Maurizio was present at the meeting too, even though he was not a shareholder. Rodolfo had been diagnosed with prostate cancer and although still highly active in the company, he wanted to bring Maurizio into the fray as quickly as possible.

  “You must fight Paolo with everything you have got,” Rodolfo confided to Maurizio privately. “He must be defeated, utterly and quickly. He is threatening everything we have and I will not be here forever.” By that time, Rodolfo was nearly seventy years old and undergoing intensive radiation
therapy to try to halt the cancer.

  The Gucci company sprang into action against Paolo, hiring lawyers, instantly putting all the licensees Paolo had contacted on notice that any attempt to distribute products under the Paolo Gucci name would be blocked. Rodolfo personally wrote to all of Gucci’s suppliers that anyone who did business with Paolo would be dropped. The battle against counterfeiters was just a skirmish compared to this. Family conflict had escalated into a full-fledged trade war. Over the next decade, the family war would pull back the curtains on the normally private world of a closely held family business, revealing shifting alliances, sudden betrayals, and rapprochements widely characterized in the press as a “Dallas on the Arno,” but actually more reminiscent of the intrigues of Niccolò Machiavelli’s Renaissance Florence.

  6

  PAOLO STRIKES BACK

  As Gucci marshaled its defenses and drew its battle lines, Paolo’s quest to develop his own name became determined and relentless. His assault began in 1981 with the first suit seeking the right to use his own name. By 1987 he had initiated ten cases against his father and the Gucci company. When his father and his uncle stymied all of his efforts to sign up suppliers, he explored the potential of manufacturing his designs in Haiti, where his family discovered he had even made his own Gucci counterfeits.

  Meanwhile, Aldo and Rodolfo clashed over the growing importance of Gucci Parfums. Although Rodolfo acknowledged that he had been able to live the life that he had thanks in large measure to Aldo, at the same time he was envious of his older brother’s confidence and power and wanted to be everything he was. He was no match for Aldo’s genius, yet he resisted and resented the control Aldo had over the business. Rodolfo was also concerned about the lack of power Maurizio, his sole heir, had in the company.

  At the outset of the struggle with Paolo, Rodolfo tried to claim control over aspects of the business that were eluding his grasp. He had figured out Aldo’s strategy to shift the lion’s share of Gucci’s revenues over to the Gucci Parfums subsidiary, in which he only had 20 percent and Maurizio had nothing. Rodolfo pressured Aldo to give him a larger chunk of the perfume business, which Aldo refused to do.

  “I can’t see any reason now for making my sons part with their shares so that you can have more,” Aldo said. Having failed to secure a larger stake in the perfume business, Rodolfo tried to exert his influence in a different way.

  He hired a young, Italian-born lawyer, Domenico De Sole, who had established a successful law career in Washington, D.C. De Sole was the first person Rodolfo had ever met—besides Paolo—who stood up to Aldo. Born in Rome, De Sole was the son of an Italian army general from a small town named Cirò in Calabria in southern Italy. As a boy, De Sole had traveled extensively around Italy with his family because of his father’s career and he grew up knowing that the world extended far beyond Calabria, a region ravaged by poverty and Mafia activity. After completing a law degree at the University of Rome, De Sole decided to apply to Harvard University Law School for a master’s degree at the suggestion of a friend, Bill McGurn, who was studying there.

  Harvard accepted De Sole, with a scholarship. Bright, ambitious, and motivated, De Sole quickly identified the United States as a land of opportunity.

  “I loved it,” De Sole said later. “It was part of my personality. Italians of my generation were all about ‘Mamma’ and ‘pasta,’ but to me, everything about the United States was new and exciting.” He often quoted a study to his friends that showed that most of the wealthy people in America were self-made, while those in Europe were generally born rich. He realized that his ambition and energy was a good fit for the scope of opportunity in the United States. He also liked the idea of being thousands of miles away from his mother, whom he described as strong-willed and controlling.

  “In the American mentality, going away to college is a rite of passage,” De Sole observed. “I still remember my awful dorm room in Dane Hall the first year. [He later moved to Story Hall.] My mother came to visit me there and looked around and she said, ‘Your bedroom at home is still waiting for you.’ At that point I realized I didn’t want to go back!”

  “De Sole is two-hundred-percent American,” said his longtime colleague Allan Tuttle, who is Gucci’s internal legal counsel today. “He moved from a relatively closed society into a more open society and today he is more American than he is Italian, especially in his enthusiasm for the system.”

  De Sole studied hard, completed his master’s degree in 1970, and worked briefly for Cleary, Gottlieb, Steen & Hamilton in New York before moving to Washington, D.C., with the venerable law firm Covington and Burlings. He had an apartment on N Street in Georgetown across from where Senator John F. Kennedy had lived. He met his wife, Eleanore Leavitt, in June 1974 on a blind date and fell in love with her baby blue eyes, strong character, and WASP value system—feeling that with her he had entered the heart of America.

  De Sole was thirty years old, seven years Eleanore’s senior. He swept her off her feet.

  “He was charming, dashing, and attentive,” she said. A career woman with a promising future at IBM, she was also impressed by his hardworking determination—Covington and Burlings accepted only one foreign lawyer within its ranks each year. Soon after they met, he introduced her to his parents, who had come to visit him in Washington, D.C.—and stayed for six weeks. De Sole’s mother liked Eleanore immediately and let him know it. By August he had proposed, and by December 1974, they were married in the Saint Albans Episcopal Church on the grounds of the National Cathedral, he in white tie and tails, she in her mother’s wedding gown.

  De Sole passed the bar and joined Patton, Boggs & Blow, a young, dynamic, growing firm on M Street, today called Patton & Boggs. The firm was well regarded and doing a lot of international work, which interested De Sole. He became determined to make partner—a competitive prospect in the growing firm of three hundred lawyers—and pushed himself incessantly.

  “Making partner became my absolute goal,” he said. “I worked harder than anybody else, I never asked for any breaks, I was obsessed with it,” De Sole said.

  After making partner in 1979, De Sole developed himself as a tax lawyer—one of the most difficult areas of the profession for a non-American—and began to draw in lucrative business for the firm by handling major Italian companies who were seeking to expand their U.S. operations.

  De Sole met the Gucci family the following year on a trip to Milan, where he was associated with a leading local lawyer, Professor Giuseppe Sena. One day Sena invited him to participate in a Gucci family meeting. As the family members arrived, they arranged themselves in factions around the long conference tables, which were arranged in a rectangle in the center of the room: Aldo, his sons, and their advisors along one side; Rodolfo, Maurizio, and their advisors along the other. De Sole and Sena were seated at the head of the room. At the beginning of the meeting, De Sole paid scant attention. He kept his head down, reading a newspaper under the table. As the meeting heated up—and Sena feared little would be accomplished—he asked De Sole if he would like to run the meeting. De Sole agreed and put the newspaper away.

  A no-nonsense, hands-on kind of person, De Sole was not intimidated by the Guccis. In turn, they weren’t particularly impressed with him—at first. Though bright and accomplished in his field, he lacked elegance and polish. If in the United States a person could become successful based on merit, Italian business and personal relationships were still highly conditioned by people’s family background and social standing. Having the right name, the right address, the right friends, and the right style were all part of the Italian concept of bella figura, or having the right form at all times. The Guccis looked De Sole over, taking in his straggly beard, ill-fitting, threadbare American suit and the white socks worn with black business shoes. But when the ebullient Aldo started to speak out of turn, De Sole said crisply, “It is not your turn to speak, Mr. Gucci; please wait your turn.” Rodolfo’s eyes widened in amazement and admiration. After the
meeting broke up, Rodolfo cornered De Sole as they were leaving the building and hired him on the spot—cheap suit and white socks notwithstanding.

  “Anyone who can stand up to Aldo like that must come and work for me!” he said excitedly. Together with De Sole, Rodolfo developed a campaign to incorporate Gucci Parfums into Guccio Gucci—a move that would raise and consolidate Rodolfo’s control over the lucrative GAC business to 50 percent, from 20 percent.

  Aldo, angered by his brother’s challenge, summoned Paolo one day to his Palm Beach office to ask for his allegiance at a shareholders meeting in which he hoped to straighten out Rodolfo’s position. Rodolfo, who couldn’t attend the meeting, asked De Sole to interrupt his holiday on the Florida keys and pop over to represent his interests at the meeting. The three of them sat around a small conference table at the end of Aldo’s long, narrow office, which was divided in half by Aldo’s desk.

  Paolo wasn’t in the mood to do his father any favors. His loyalty to the firm and the family had been breached by what he saw as unfair treatment. He told Aldo he could have his vote if he could work under his own name.

  “How can you expect me to help you fight Rodolfo when you won’t even let me breathe?” Paolo asked his father, who had sprung up from his seat and was pacing agitatedly. “If I can’t work within the company, I must be able to work outside it. You fired me, I didn’t ask to be fired,” he said hotly.

  Aldo paced faster. The thought that his son was trying to force his own hand was unacceptable to him. As he stalked back toward his desk, his temper boiled over. He picked up the nearest thing on his large desk, a lead crystal Gucci ashtray that Paolo himself had designed.

  “You son of a bitch!” Aldo roared as he threw the ashtray across the room toward his son. The ashtray smashed against the wall behind the conference table, showering Paolo and De Sole with a hailstorm of crystal fragments.