Gucci Group to acquire Boucheron International S.A. Gucci Group announces creation of joint venture with FJ Benjamin Holdings Ltd in Asia. Yves Saint Laurent Couture acquires license rights of Cartier International and Schwartz & Benjamin.

Gucci Group N.V. (NYSE and Amsterdam: GUC) announces today a series of acquisitions and alliances designed to press forward the Group's multi-brand strategy and extend its direct control over the brands in its portfolio.

Gucci has reached an agreement with Schweizerhall Holding AG to acquire Boucheron International S.A., one of the world's most prestigious and exclusive jewelry, watch and perfume brands.

Jewelry and watches form an important segment of the overall luxury goods market and demonstrate attractive growth and profit characteristics while remaining relatively fragmented. Gucci believes that, under its ownership, the Boucheron brand has significant development potential, which it intends to exploit fully on a global basis.

This will be achieved by promoting the Boucheron brand image internationally; through extension of the jewelry and watch lines as well as expansion into other product categories; by enhancing the design content of the product portfolio; by expanding Boucheron's retail footprint through the opening of directly operated stores in key luxury goods markets; and, through an expanded selective distribution presence on a wholesale basis worldwide.

Founded in France in 1858 with its flagship store on the Place Vendome in Paris, the world's capital for haute joaillerie, Boucheron has a long established heritage as an international luxury jeweler and watchmaker. The Company has built on its reputation for high quality and exclusivity by expanding into luxury fragrances with a product range (Boucheron and Jaipur), which is strongly identified with its jewelry creations. A new line is planned for launch this year in key markets. The company also has distribution rights of other fragrances in the United States.

Budgeted revenues for Boucheron for the current year are approximately US$85 million. Management expects the acquisition, which will be completed on June 30, 2000, to be earnings dilutive on a pre-goodwill basis until 2001.

Joint venture with FJ Benjamin Holdings Ltd

Gucci also announces, subject to regulatory approval, the creation of a new 65% controlled joint venture with FJ Benjamin Holdings Ltd., for the exclusive distribution of Gucci, Yves Saint Laurent Couture and Sergio Rossi products in Singapore, Malaysia and Australia.

The joint venture gives the Group direct control over the Gucci brand in these important markets. In addition, the company will operate retail stores for Yves Saint Laurent Couture and Sergio Rossi, which have not been directly represented in these markets.

FJ Benjamin has been the Gucci franchisee for over 20 years and has made an excellent contribution to building Gucci's presence and brand awareness in the region. The joint venture will combine FJ Benjamin's knowledge of these markets with Gucci Group's expertise and financial strength to further develop each brand's directly operated store network.

The new company is expected to significantly improve the Group's sales and profits in this region. Mimi Pun, Managing Director of Gucci Hong Kong, China, Korea and Taiwan will be appointed as the joint venture Chief Executive Officer, reporting to Brian Blake, President and Managing Director of the Gucci Division worldwide.

FJ Benjamin operates 10 Gucci stores and total budgeted Gucci related revenues for fiscal 2000 of more than US$41 million. The joint venture will commence on 30 June 2000, and is expected to be accretive immediately.

Yves Saint Laurent Couture acquires license rights held by Cartier
International and Schwartz and Benjamin
In addition, Gucci is pleased to announce that Yves Saint Laurent Couture

has acquired the license rights held by Cartier International for Yves Saint
Laurent branded products, including rights for the manufacture and worldwide
distribution of Yves Saint Laurent branded watches and jewelry. This
agreement is an important step in Yves Saint Laurent Couture's ongoing
strategic realignment and brand re-launch.
It strengthens control over the Yves Saint Laurent name, as well as control over the production and distribution of product categories which are key in terms of brand image and which are also expected to make a significant contribution to future sales and profits.

Yves Saint Laurent Couture has also reached an agreement to acquire the license rights held by Schwartz & Benjamin for the manufacture and distribution of Yves Saint Laurent branded women's shoes in the United States and certain Asian countries.

Gucci Group's Division Sergio Rossi will produce Yves Saint Laurent women's shoes to be sold in these regions, while Gucci Timepieces will launch new Yves Saint Laurent watch and jewelry collections starting in 2001.

Gucci has demonstrated its ability to generate outstanding profits from its Timepieces business and expects that the Yves Saint Laurent watch business will be highly profitable.

Domenico De Sole, President and Chief Executive of Gucci Group N.V. said: "The transactions we are announcing today underline our determination to successfully pursue the growth strategies we set for the Group in the luxury goods industry. Our joint venture with FJ Benjamin Holdings and the acquisition of the Yves Saint Laurent licenses for jewelry, watches and shoes reinforces our control over production and distribution of our brands. These transactions offer great opportunities to exploit Group synergies and achieve further profitable growth."

"The acquisition of Boucheron," De Sole added, "extends our involvement in highly profitable product categories such as jewelry and watches, adds excellent luxury perfumes to our fragrance portfolio, and brings with it a new and entirely complementary skill base in fine jewelry, together with an outstanding management team."

Jean-Claude Le Rouzic, President and Chief Executive Officer of Boucheron said: "I am very excited about the opportunities that being part of the Gucci Group will create for the Boucheron brand. Although we had very strong offers from other groups we considered that Gucci would provide the best home for our company and would provide the strongest brand management and operational expertise to take the Boucheron brand to the next stage in its development as a global luxury brand."

Gucci Group N.V. is one of the world's leading multi-brand luxury goods companies. Through the Gucci, Yves Saint Laurent and Sergio Rossi brands it 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 Amsterdam Stock Exchange.

Under the safe harbor provisions to the U.S. Private Securities Litigation Reform Act of 1995, the Company cautions investors that any forward-looking statements of projections made by the Company, including those made in this document, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Factors that may affect the Company's operations are discussed in the Company's Annual Report on Form 20-F for 1998, as amended, filed with the U.S. Securities and Exchange Commission.