Gucci buys into leather
As part of its ongoing strategy to bring as many of its manufacturing resources in-house as possible, the luxury goods empire Gucci has acquired the Italian tannery, Caravel Pelli Pregiate.
The Fucecchio, Tuscany-based tannery has a strong track record in the production of high quality leathers, including crocodile, and is an established supplier to many of Europe’s most prestigious footwear and leather goods brands. Last year, Gucci business accounted for some 20% of turnover and it is understood that Gucci has no plans to end the tannery’s supply relationships with its other customers.
Gucci says that as well as enhancing operational control over its supply chain, the tannery will provide increased flexibility and quality control across the entire product range. Using the existing plant as its basis, Gucci has plans to build what it calls a ‘state-of-the art tannery’ that will be the biggest precious skins tannery in the world.
Though the cost of the purchase was not disclosed, Gucci Group says that its impact on near-term earnings per share is not expected to be material. In fiscal year 2000. leather goods accounted for approximately $680 million or 30% of Gucci Group’s total revenues.
