Death of the Designer; The titans of luxury have shifted fashion's focus from the designer to the brand. That's good for business, but not for creativity. Ciao, Tom Ford.(Industry Overview)

Byline: Dana Thomas

In his 10 years as creative director of Gucci, Tom Ford has taken the 80-year-old Florentine leather-goods company from the brink of bankruptcy to the height of success. With his sexy velvet hip-huggers, bad-girl stilettos and cool bamboo-handled handbags, Ford has turned Gucci into the luxury brand of choice for the young and beautiful around the world. In 2002 Gucci's sales were nearly $2 billion--nine times more than when Ford arrived. So why is Gucci letting him go? After a year of tenuous talks with Gucci's majority shareholders, Pinault Printemps-Redoute S.A. (PPR), Ford and CEO Domenico De Sole announced last November that they would not renew their contracts, which expire this spring. On Wednesday in Milan, Ford will present his final womenswear collection for Gucci. And next week in Paris, he'll take his final bow for PPR-owned Yves Saint Laurent Rive Gauche, which he also designs.

Ford, 42, who refused to be interviewed for this story, has yet to announce his future plans. Rumors have him doing everything from taking over at Versace to becoming a Hollywood film producer. But the story of his career at Gucci is an illuminating one for the luxury-fashion industry. Indeed, his tenure paralleled a decadelong boom for luxury couture, which now does $100 billion in sales a year. Yet his departure shows that in today's conglomerate-heavy market, being one of the world's most successful designers is no guarantee of a job. As luxury companies grow bigger and bigger, the role of the couturier keeps shrinking. The message: you can be replaced.

That's tough love in a business that has always embodied the utmost politesse. But that's what luxury has become: a fiercely competitive, profit-driven global industry of publicly traded corporations that care more about shareholder demands than the ever-fickle fashion set. Since the mid-1980s, tycoons such as Francois Pinault, Patrizio Bertelli of Prada and Bernard Arnault of LVMH have been buying up luxury's most famous names and reinvigorating them, turning small family-run businesses into multinational brands with $1 billion--or more--in annual sales.

Along the way, the luxury titans have switched the focus of luxury fashion from the designer to the brand. This allows the bosses to change designers regularly without disrupting the image of the house. Celine, for example, is looking for a replacement for Michael Kors; Bill Blass is on its third designer in four years; Lanvin is on its fourth in a decade, and Givenchy is about to hire its fourth womenswear designer in eight years. "It is such a competitive marketplace that if you take your eye off the ball for a moment, you're out," says Rita Clifton, U.K. chairman of Interbrand, a global-brand consultant in London. "The brand is the most sustainable and important corporate asset."

It wasn't always like this. Luxury fashion as we know it was created in the late-19th century by Charles Frederick Worth, an England-born, Paris-based couturier who shifted dressmaking from a made-to-order business to one that provided seasonal collections. By the 1920s, designers such as Coco Chanel and leather artisans like Guccio Gucci had opened their own businesses; as the founders died, the houses either closed or were taken over by heirs.

That began to change after Christian Dior dropped dead of a heart attack in 1957. His brand was so strong that the owners appointed his 21-year-old assistant, Yves Saint Laurent, to succeed him. As a protege, Saint Laurent maintained Dior's line. But his tenure came abruptly to an end when he was called to military service--and when he returned to fashion in 1962, it was to open his own house.