Yves Saint Laurent: A History
In a similar route of Dior, Saint Laurent made his debut on the fashion scene with French textile tycoon, Boussac. The termination of their business relationship serves as the origination point for the YSL brand story, which I'll outline for the sake of "brevity". It's amazing how fun business can be!
1936 YSL is born in French Algerian port of Oran
1955 YSL joins the creative staff at Dior
1958 After Dior's death, YSL makes his debut collection (trapeze line) as new Creative Director of the Dior Maison, age 21
1960 YSL launches the beat style at Dior, and Boussac quickly replaces him with Marc Bohan (Sounds a little like the Marc Jacobs grunge line at Perry Ellis, no?)
1962 YSL launches his own line with life and business partner, Pierre Bergé, backed by American financier, J. Mack Robinson
1963 Robinson sells his shares, and American fragrance brand Charles of the Ritz obtains 80% share of the couture house against 20% held by YSL and Bergé
1965 Infamous Mondrian collection debuts
1966 Relatively affordable pret-á-porter line, Saint Laurent Rive Gauche, is launched
1967-8 Makes headlines with launch of ethnic, safari and nude looks
1972 Pharmaceuticals giant E.R. Squibb takes over Charles of the Ritz, along with control of YSL perfume and cosmetics, allowing YSL and Bergé purchase full control of group's couture activities
Full ownership of couture activities gave YSL and Bergé the right to expand the business beyond couture, using the brand's name through licensing agreements.
Haute couture will stay for perhaps another five or ten years. I'm only keeping the salon going because I cannot ethically justify putting 150 people out of work." ~Yves Saint Laurent, 1971
1977-8 Launch of Opium perfume and creation of YSL Beauté
1986 YSL and Bergé buy Charles of the Ritz back from E.R. Squibb, acquiring full rights to the YSL fragrances and cosmetics, expanding their business 10 times over; many financial partners were required for this purchase, among them Carlo de Benedetti, who came to own the largest share of the company after YSL and Bergé themselves.
1989 To meet burgeoning debts, YSL is forced onto the secondary stock market in Paris
1991 De Benedetti demands to be released from his investment amidst the global recession of the early 90s; Bergé and YSL, unable to find new investors, drive themselves further into debt buying him out of his share
1992 Another major investor, Wasserstein-Perella Bank, indicates that it must sell it's 15% investment in the YSL Groupe; Bergé demands that their replacement investor be European (to avoid having a multinational company)
L'Oreal makes an offer for 100%, but Bergé does not want the company to be run by consumer goods giant, Nestle (L'Oreal will acquire YSL Beauté). LVMH also expresses interest, but backs out after Bergé requests that he and YSL maintain creative control over the YSL brand and its primary competitor, Dior (remember, LVMH structures its brands to avoid collaboration, brand dilution, and in this case, sabotage).
YSL and Bergé, unable to come to an agreement for an investor, begin selling off their personal shares, and are subsequently investigated for insider trading. (Check out the 1992 film documentary by Hamish Bowles on YSL here.)
1993 The groupe is sold at 100% to French national company, Sanofi, for a reported $650 million. YSL maintains position as creative director of his couture line
1997 After years of losses on the YSL brand, Sanofi shops around for a new buyer for YSL
1999 After serving as white knight in rescuing Gucci from a hostile takeover from LVMH, Francois Pinault (head of PPR and majority stakeholder of the Gucci Group at 53.2%) acquires the YSL brand
The Couture Division (including pret-á-porter and fragrances) is sold to Gucci Group, where Tom Ford is named Creative Director of YSL Rive Gauche in addition to his role as Creative Director for Gucci.
The Haute Couture Division stays under direct control of Pinault through his holding Artemis, and remains under the creative direction of YSL.
The DNA of Yves Saint Laurent is completely different from the DNA of the Gucci brands. These dreams are kept alive by our creative directors and our designers." ~Robert Polet, Gucci Group CEO
2000 Gucci Group immediately applies its direct-control mantra for production and distribution on the YSL brand, terminating more than 150 licensing agreements and creating a network of +62 directly-operated stores in order to create brand image and service consistency, but this attempt drives YSL further into the red
2002 YSL's final show as creative director of YSL Haute Couture
I have today decided to bid farewell to the world of fashion I have so loved." ~Yves Saint Laurent, 2002
2004 Tom Ford leaves Gucci Group, and is replaced by Stefano Pilati as Creative Director of YSL couture
2005 YSL brand profits fall from €169m in '04 to €162m, with losses ballooning to €76.4m
2006 Valerie Hermann, a veteran of LVMH, assumes position as CEO of YSL
After her first full year, YSL revenues rise 19% and operating losses fall 24.9%
With the fixed costs I have, I need more volume." ~Valerie Hermann, YSL CEO
Lessons in Luxury from the French
- The French model for luxury presents a growth pattern that typically occurs through brand extension and/or brand-buying, in the case of conglomerates.
- Individual brands pursue growth primarily through brand extension, with very limited second line development (YSL Rive Gauche is an exception, not the rule).
- Most French brands have moved from singular couture brands into luxury conglomerates, where specific skills and resources may be shared through brand synergy, but unique brand image must be carefully managed.
- It's a good idea to keep your brands separated, from the creative director down to the production staff, in order to maintain unique brand identities.
- Too many licensing agreements can dilute the brand image when not properly controlled, but a group-wide policy of one-size/strategy-fits-all can have the same effect.
- Today, the labels of former couturiers make their money in accessories, fragrances and cosmetics. Couture is needed to hold uphold the luxury brand image (for now), but the market for couture has nearly disappeared.
- Without the high profit margins of couture sales, luxury fashion companies must rely on volume sales in lower price categories. This impacts the image of what some feel a luxury company should be (for example, a guy I look up to, Seth Godin), but without a couture market, the industry must look for a new strategy.
I've always said that the couture would die with Yves Saint Laurent. Now it's a domino effect. The couture has lost its raison d'etre. Couture isn't art. It's not meant to be hung in a closet like a painting. The women who wore couture no longer exist; the art de vivre that spawned couture has died. If houses such as Chanel and Dior one day get proof that they can sell as many bags and fragrances without a couture show, they'll stop couture, too." ~Pierre Bergé, 2004, upon hearing that Emanuel Ungaro would leave couture (Vogue)
Sources: International Directory of Company Histories, Vol. 23. St. James Press, 1998; Vogue Magazine; www.fundinguniverse.com; personal notes