YSL looks to rebound

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Ceo domenico de Sole and Creative Director Tom Ford, the zealous duo that rescued Gucci Group from bankruptcy and fashion purgatory six years ago, are forging ahead with its new challenge: restoring the image of Yves St. Laurent, France's once great high-fashion brand.

More than likely, YSL will get the same attention the team gives Gucci, say some industry experts.

"Gucci has taken a firm control of its business in every aspect. And every other major player in the luxury goods market is watching and following," says Roger Tredre, managing editor of Worth Global Style Network, an online fashion business resource. "Gucci is taking exactly the same tack with . . . YSL," says Mr. Tredre. "[Messrs. De Sole and Ford] are relaunching [YSL's] retail look, expanding its retail operation, rethinking the design and image entirely and will begin marketing the whole package like mad."


Advertising is key to YSL's relaunch, says Mr. De Sole. As a result, expenditures during the next few years will be substantial, perhaps 12% or more of YSL Couture's revenues, he says. "My goal is to make Yves St. Laurent as successful as Gucci."

Some fashion arbiters are convinced the duo will pull off the makeover. "We have every confidence that Yves St. Laurent sales will grow as rapidly as when the team took over Gucci," says Ann Stordahl, general merchandise manager for women's apparel at Neiman Marcus Group.

To accomplish the makeover, Mr. Ford is focused on rejuvenating every aspect of YSL's brand image, including product design, displays, store architecture and ad campaigns, says Mr. De Sole. Gucci's marketing strategy of global consistency -- identical ads and windows in every country -- and the gutsy, hard-edged glamor presented by haughty unisex models on fashion magazine pages are all Mr. Ford's vision.

Mr. "Ford is the sharpest, sassiest fashion creative on the planet," observes Mr. Tredre. "He has an intuitive understanding of how the top-designer market functions, and he talks strategy better than anyone."


For now, Mr. Ford is keeping YSL's new brand image under wraps. Hinting at what to expect, Mr. De Sole says: "Quoting Tom, `The Gucci woman (or man) is a rock star, and the YSL woman is a sophisticated movie star.' "

Whatever image Mr. Ford creates for YSL, it will be aggressively marketed, confirms Mr. De Sole. Gucci, which was a 1996 Ad Age Marketing 100, usually allocates around 7% of revenues for advertising, which amounted to $87 million last year.

And revenues are expected to swell. Analyst Sagra Maceira de Rosen of J.P. Morgan expects YSL ready-to-wear annual revenues, now $88 million, to rise 50% or more beginning in 2002, while the stagnating $594 million cosmetics group should grow 12%.


The first new ads for YSL will be done in-house. Promotions of the 2001 spring-summer line will be in fashion and lifestyle magazines around December.

YSL ads probably will look as sleek as Gucci's ads featuring leggy models clad in Mr. Ford's latest designs, say industry observers.

"Gucci has gone from staid to current and hip," says Linda Sawyer, managing partner of Deutsch, New York. "As a fashion leader, its ads are innovative and have succeeded in moving the needle [for the industry] in that direction."

Keeping tight control on advertising and even in-store presentations of Gucci products is one way the dynamic duo transformed the company from a tattered leather-goods company to a dazzling cutting-edge clothing and accessories icon. Expect the team to follow the same strategy with YSL, says Mr. De Sole. "It's critical for us to get control of the brand."

As is, only a few department stores, such as Saks Fifth Avenue and Neiman Marcus, are allowed to sell Gucci; ditto for YSL. During his "terminator tours" through stores worldwide, Mr. De Sole has been known to yank his lines if they are not displayed in a visible spot, like near the escalator, or if the goods are not presented up to par.

"We must do that to see to it that the brand image is managed properly and [to] make the brand absolutely clean," says Mr. De Sole.


As with the old Gucci, YSL's major downfall was overexpansion into licensing: The YSL logo was embossed on hundreds of goods, such as socks and baseball caps. Moving swiftly to get control of the overexposed brand, Mr. De Sole has gobbled up or eliminated most licensing agreements since purchasing the fashion house eight months ago.

"That's the way you control the brand," says Mr. De Sole.

The elimination of licensing agreements means expansion of YSL retail stores is necessary to replace the lost revenue stream. Mr. De Sole is shooting for 60 such stores by 2002, up from the current 25.


One place you probably won't find the newly designed YSL clothes, jewelry, shoes and perfume bottles is on the Web.

"Gucci can afford to pick its moment of entry," says Mr. Tredre. "since the advantage of being first in the online designer market has been overestimated."

As Messrs. De Sole and Ford know better than most, sometimes it's cool to be fashionably late.

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