Sanofi Beauté was Gucci’s largest acquisition by far, but it was not the first. In November
1997, the company bought back the Gucci watch business from Severin Montres, a long-time licensee,
for $170 million. Gucci’s strategy for Gucci Timepieces provided the management, in some respects,
with a model for handling YSL and Sergio Rossi. Between 1997 and 1999, Gucci increased the
average retail price of its watches from around $500 to $700 while cutting distribution from 7,000
points of sales to a planned 6,000 doors (of better quality overall) by the end of 2000. Gucci also
realized considerable savings by consolidating back office operations, such as warehousing, for all of
its product groups. But YSL and Sergio Rossi presented a challenge Gucci had never faced: the need
to manage independent brands.