The Gucci Group announced on July 6th 2001 that it had acquired Balenciaga S.A., owner of the Balenciaga luxury brand.

Nicolas Ghesquière will continue as Creative Director of Balenciaga, with broad responsibilities for all aspects of the brand's creative direction and image. Last month, Ghesquière won the coveted “International Designer of the Year” award from the Council of Fashion Designers of America following several seasons of highly acclaimed collections shown in Paris.

Working with Ghesquière, Gucci Group plans to accelerate the development of Balenciaga as a global luxury brand, building on its exceptional fashion heritage and focusing primarily on women's ready-to-wear, accessories and fragrances. Over the next few years, the company plans to open flagship stores in the world's fashion capitals as part of a plan to broaden its market reach.

Gucci Group will own 91% of the share capital, with Nicolas Ghesquière holding the balance. Balenciaga will operate as an independent company under the Gucci Group umbrella. In line with Gucci Group's multi-brand strategy, the business will enjoy full creative autonomy while benefiting from the support of the Group's extensive resources and expertise in the global luxury goods business.

Pascal Perrier, currently Executive Vice President and Director of Licensing at Yves Saint Laurent, will be appointed Chief Executive Officer of the business, effective September 1. Perrier brings considerable knowledge of the global luxury fashion industry to Balenciaga. Prior to joining Yves Saint Laurent he was Managing Director of CÉline Japan K.K. and Managing Director of CÉline S.A..

Pierre FoulquiÉ is appointed Chief Financial Officer of Balenciaga effective immediately. He joins from Yves Saint Laurent, where he was Group Controller.

Domenico De Sole, President and Chief Executive Officer of Gucci Group N.V., said: “We are delighted to acquire one of the world's great fashion brands and we are particularly pleased that Nicolas has agreed to play a key role in its future. His work displays exceptional creative talent and commercial sense and Balenciaga has become one of the outstanding fashion stories in recent years. We have already put in place an excellent management team led by Pascal, and with our support, we expect the brand's global development to accelerate.”

Tom Ford, Creative Director of Gucci Group and of the Gucci and Yves Saint Laurent labels said: “Cristobal Balenciaga was one of the masters of 20th century fashion. The house he created was one of the most influential in fashion history. Under the design leadership of Nicolas Ghesquière, Balenciaga has regained this position and is poised to continue to influence fashion in the 21st century. Nicolas' design talent is evident and this combined with his energy, intelligence and charm, will guarantee continued success. I am thrilled that Nicolas has decided to work with Gucci Group and I am excited about the future of Balenciaga.”

Nicolas Ghesquière, Creative Director of Balenciaga, added: “Since I started with the house of Balenciaga, my only wish has been to give it the international radiance it once had. I am very happy to have found in Gucci Group the ideal partner who shares this vision.”

In 2000, Balenciaga had net revenues of around $20 million, approximately two-thirds of which came from fragrances and the balance from ready-to-wear and accessories, including from licensed businesses. Under the terms of the acquisition, Balenciaga will retain creative control and direction over all aspects of the brand. A manufacturing and distribution agreement for the Balenciaga fragrances has been entered into with Groupe Jacques Bogart for respective periods of up to 3 and 4 years under YSL BeautÉ control. A new fragrance line, which is expected to be launched in 2004, will be developed under license by YSL BeautÉ, Gucci Group's fragrances and cosmetics division.

The House of Balenciaga was founded in Spain in the 1920's. In 1937, Cristobal Balenciaga opened in Paris at 10 Avenue George V, where the flagship store still operates today. Balenciaga flourished as one of the great icons of the Paris fashion world and internationally under the guidance of Cristobal Balenciaga. He closed his haute couture business in 1968. The label subsequently continued primarily as a licensed fragrance operation until 1986 when it was acquired by the French fragrances and fashion group, Groupe Jacques Bogart. In 1995, the group hired Nicolas Ghesquière; his debut collection for the spring/summer 1998 season made a strong impact and effectively started the revitalisation of the Balenciaga brand.

Details of the financial terms of the acquisition were not disclosed. However, Gucci Group notes that the impact on its financial condition and near-term earnings per share is not expected to be material.

Gucci Group N.V. is one of the world's leading multi-brand luxury goods companies. Through the Gucci, Yves Saint Laurent, Sergio Rossi, Boucheron, Roger & Gallet, Bottega Veneta, BÉDAT & Cº, Alexander McQueen and Stella McCartney brands, the Group designs, produces and distributes high-quality personal luxury goods, including ready-to-wear, handbags, luggage, small leather goods, shoes, timepieces, jewelry, ties and scarves, eyewear, perfume, cosmetics and skincare products. The Group directly operates stores in major markets throughout the world and wholesales products through franchise stores, duty free boutiques and leading department and specialty stores. The shares of Gucci Group N.V. are listed on the New York Stock Exchange and on the Euronext Amsterdam Stock Exchange.

From the Gucci Group Press Release