Packing their bags

With Gucci set to fall into French hands, the two men who transformed the fashion house could decide to sashay away.

They are the most dynamic duo in fashion. A charismatic Texan designer and an Italian lawyer who knows his way round US business. They revived Gucci, floated it and made it an €8.9bn (£6bn) business.

But speculation is rife that Tom Ford and Domenico De Sole are ready to quit Europe's most famous fashion house.

The two have contracts that run out next year. This coincides with the date when François Pinault, the French billion- aire, is due to make a full bid for the business under an agreement signed in 1999.

The deal was struck when Gucci was facing a hostile bid from LVMH, the luxury goods group run by M Pinault's arch rival, Bernard Arnault. Then M Pinault's Pinault Printemps Redoute bought a blocking stake in Gucci. After a long legal battle LVMH sold its holding to PPR last year, giving it a majority holding in Gucci.

Last week Serge Weinberg, chief executive of PPR, told analysts in London that he was happy for the company to go ahead with the deal for PPR to buy the 41 per cent of Gucci it does not already own for €93.70 a share. The cost, €3.9bn, has been weighing heavily on PPR's balance sheet. It also appears to be holding Gucci's price up. On Friday its shares closed at €86.80. Analysts reckon that without PPR, the shares would be half that.

More worrying is the increasing likelihood that PPR will end up running Gucci without either of its stars.

Mr Ford, who made Gucci the must-have for people who pay £300 for a pair of shoes, has made some €135m from exercising stock options in the last three years and is sitting on nearly €50m more if PPR buys Gucci out. Mr De Sole has cashed in only €14.4m of shares so far, but he holds a stake worth nearly 10 times that.

Mr Ford is said to be ready for new challenges. Mr De Sole simply doesn't get on with Serge Weinberg, something François Pinault admitted to analysts last week.

A senior PPR executive commented: "Did Dior survive the departure of Christian Dior? Yes. Did Chanel survive the departure of Coco Chanel? Yes."

Though no one at Gucci is commenting on whether the duo will go, it seems that the new owners are already preparing for the worst.