Domenico De Sole is jumping into the red-hot watch business.
Gucci’s chief executive has bought Boucheron, the 150-year-old Paris watch and jewelry maker, which is expected to ring up $85 million sales this year for an undisclosed price.
And he told Bloomberg News that he’s interested in buying Mannesman’s newly available luxury watch division – although he’s likely to get competition from LVMH’s Bernard Arnault.
De Sole also announced two purchases to help solidify his grip on Yves Saint Laurent.
He has bought back the license for Yves Saint Laurent watches and jewelry from Cartier.
And he has repurchased the rights to make Yves Saint Laurent women’s shoes from Schwartz & Benjamin.
De Sole has quickly built Gucci into the world’s No. 3 luxury goods group, behind LVMH and Vendome.
But his buying binge – especially last year’s purchase YSL – is slowing Gucci’s profit growth.
While Gucci’s first-quarter sales nearly doubled to $530 million from last year, De Sole warned that profits for the February-April quarter would drop about 25 percent from last year. He also said yearly profits would be about $3.10 a share, instead of the $3.45 initially forecast. Gucci stock rose $1.25 to $81 yesterday, despite the warning, but the stock is still down nearly 30 percent this year.