“Tom is in many ways a genius, but there were some things he simply could not do,” Pinault says, picking at a plate of croissants after a breakfast meeting in his office. He is wearing, as usual, a sleek navy suit and talking, of course, about Tom Ford, the big-living, shirt-unbuttoned-to-his-navel Texan who, with an Italian lawyer named Domenico De Sole, spent the ’90s making Gucci synonymous with sensuous modern luxury. Gucci’s investment bankers approached the senior Pinault in 1999, when they were seeking a white knight to thwart a creeping takeover attempt by rival Bernard Arnault of LVMH. In the frenzied 18 months that followed, Pinault created a luxury division around Ford by acquiring controlling stakes in such brands as YSL, Sergio Rossi, Boucheron, Bedat & Co., Bottega Veneta, and Balenciaga.

But Ford couldn’t replicate his Gucci magic with the other labels (most conspicuously YSL), and one of the first things the new boss did after the dinner at L’Ami Louis was to jettison the designer by declining to give Ford a new contract guaranteeing the total creative control he was demanding. The fashion world was appalled. “Over time, we would learn that there are seven stages a person goes through when Tom Ford leaves Gucci,” Ian Frazier wrote in a New Yorker piece that skewered the hysterical reaction. “The first is shock and rage. The second is also shock and rage, with rage starting to predominate. The third is pretty much all rage; I forget the stages after that, because I’m still partly in shock.” But fashion insiders weren’t joking when they predicted that Gucci would die a long and very public death.

That has not happened. After a slump that stretched into 2005, Gucci’s revenue rose 16 percent last year to more than $2.7 billion, helped by a cooperative economy and growth in China, Russia, and other emerging markets. Gucci, always the backbone of PPR’s luxury group—its profits subsidize losses in some of the other brands, especially YSL—reported operating margins of nearly 30 percent in 2006.

To say that Gucci’s current designer, Frida Giannini, is no Tom Ford is, to Pinault, precisely the point. The 34-year-old Roman, who wears her blond hair long and straight and often dresses in jeans and a black turtleneck (not a double-G logo in sight), is among the most understated personalities in a business that feeds on—and spits out—gigantic egos. “I am just not the kind of person who wants to be the embodiment of the brand,” she says, during a conversation in her Milan satellite office several hours before a recent show. “I serve the brand; I take care of it.”

Giannini, who had been the accessories designer under Ford, has been in charge for less than two years. Amid the turmoil that ensued after Ford left, Giannini was one of three designers who split his duties, an arrangement that proved disastrous. Early last year, after reams of snarky press and plenty of fractious internal politics, Giannini was given the entire label and paired with brand C.E.O. Mark Lee, a protégé of De Sole’s. “We lost a lot of time,” Pinault concedes.

When Ford was running Gucci, the clothing didn’t compromise. You were either a Gucci woman—strong and sexy in menacing black—or you weren’t. ­Giannini has both deepened and widened the brand, adding colors and patterns, updating some iconic designs from Gucci’s heyday in the 1960s and, in general, softening the silhouette. Most of Gucci’s 220 boutiques, where more than 70 percent of the brand’s revenue is booked, have been revamped to seem more airy and playful, a radical change from the monochromatic power emporiums Ford designed in the 1990s.

To Pinault and Robert Polet, a former Unilever executive who is now C.E.O. of the Gucci Group, the label’s recent success is proof that a diva designer can be a liability—a lesson that has been reinforced at Bottega Veneta. The high-end brand has been a sleeper success for PPR in recent quarters, reporting $350 million in revenue last year, up from $56 million in 2002, with 21 percent margins. Its sales are now higher than YSL’s. Tomas Maier, the taciturn German who designs the line, has no interest in creating a mythos around himself, says Pinault. “He never talks about himself as the center of the world. It’s always the people, the materials.”

Pinault and Polet’s audacious plan to double Gucci’s sales in the next four years depends almost entirely on the continuing health of luxury-goods markets around the world. “Anyone who says they know what the demand will be in, say, India for these kinds of goods in three or four years isn’t being honest,” says analyst Antoine Belge, who follows luxury companies for international bank HSBC. But PPR is charging ahead. Gucci plans to have 16 stores in China by the end of the year. A Mumbai location will open in October. And by early next year, a new 45,000-square-foot Manhattan flagship will be unveiled on Fifth Avenue.