Italian fashion house Gucci handbagged acquisitive French luxury goods giant LVMH yesterday by introducing a stockownership plan to limit LVMH's voting rights and block its bid to join the board.

The designer gloves came off in the long-running control battle between the two household names when Gucci announced it had granted a specially created employee trust an option to buy up to 37 million new common shares, thereby substantially cutting LVMH's 34.4 per cent stake.

LVMH reacted almost instantly, saying it would fight the protective device. "LVMH plans . . . to react against this unacceptable initiative using all the means at its disposal."

Gucci currently has 58.5 million shares outstanding, and full exercise of the option would boost this to 95.5 million. Gucci said the trust had immediately exercised the right to buy 20,154,985 shares - equal to the stake built up by LVMH and set to reduce its say in its Italian rival to 26 per cent.