Overall context:

After working as the creative director for Dior, Yves Henri Donat Mathieu-Saint-
Laurent founded the luxury brand Yves Saint Laurent in 1962. It was without any
doubt that due to his immense talent and remarkable designs, YSL experienced a
successful growth in the luxury market. He started by creating a haute couture
collection. Later, he developed women’s and men’s ready-to-wear, perfumes and
cosmetics. Along with the launch in cosmetics, YSL was at the time bought and
owned by Charles of the Ritz. However in 1986, Saint-Laurent and Bergé acquired
the control of its activities causing them to accumulate ample amounts of personal
debt. Simultaneously, between the late 1980s and early 1990s, YSL seemed to
experience a decline in interest from its customers leading to their eventual loss of
control on the company. In 1999, the owner of the Kering Group (previously PPR),
François-Henri Pinault, acquired YSL from Elf Sanofi. Yves Saint Laurent and Pierre
Bergé were still advisors of the company as they had limited authority. Under the
management of the PPR group, YSL had the opportunity to focus once again on the
haute couture business. Furthermore, it was an opportunity for the brand to grow as
it was finally able to open its own independent stores and sell directly to customers.
At the same time, YSL had started to buy again it's licensing agreements in order to
have the possibility to control YSL’s brand image in its entirety. Concerning
creativity, between 1999 and 2012 Tom Ford and Stefano Pilati were the creative
directors of the brand and they both were not successful in reviving the YSL brand. It
was not until Hedi Slimane was re-hired by PPR in 2012, that the brand started
experiencing a regrowth. He successfully revived the ready-to-wear line and led YSL
to reach a very high revenue of €974 million in 2015. In 2016, Hedi Slimane decided
to leave YSL without any explanation and after his departure, Anthony Vaccarello
became the new creative director of the company. During the Spring-Summer 2017
collection there were many controversial discussions from the public concerning
Vaccarello’s work and questions are arising about the nexts steps of the brand.

Do you think that Slimane was truly successful? Was the success sustainable after
his departure?

After Slimane joined the house, the brand saw an increase of 41 million euro in
operational income. Slimane had worked already before for the brand was aware of
the roots of the brand. He brought reform to the house. He had a good sight, the
change of YSL label to Saint Laurent Paris was an evidence as it incited the
customers to buy the label. He had support from the management and Bergé,
making things easier. He was very successful as he used a push approach and
people were still buying his new looks even after criticism. He had a strong identity
and the fact that he never talked about his muses attracted the customers even
more.
However, his departure from the house still remains unexplained. The empire that he
built while keeping the values of the house intact seems to be sustainable. With
Kering group acquiring multiple luxury brands, and seeing stable financial growth,
preserving the brand with new creative director would not be a difficult task as long
as the core values of the brand are intact.
What were the pros and cons of being acquired by PPR? Was reducing the
number of licenses a good decision for the brand? Why?

Pros:
PPR is a huge conglomerate engaged in developing high growth luxury brands. It is
interesting to be a member of such a group. PPR is also an important source of
financial means, which are needed by YSL. YSL didn't need to worry about personal
debt and operating capital problems anymore, because PPR group had strong
financial resources. Although there were many brands under PPR, the strategy of
creating a conglomerate working collaboratively rather than competing benefitted
YSL. Besides, PPR classified YSL's product line, for example, separating perfumes
and cosmetics from couture, and further opened its physical store to control products
and customers directly. The decision of bringing in Hedi Slimane as creative director
and giving him the freedom to work in his own way was the major table turning point
for YSL. Focus shifted to haute couture again.

Cons:
After being acquired by PPR, PPR denied unconditional authority to saint Laurent
and his friend Bergé, because their vision did not align with the company’s vision.
However they remained advisors. The retirement of the romantic duo and along with
the creativity and managerial approach, many questions were raised if PPr would be
able to revive the brand.
The decision to take back the licences was an important step towards reviving the
brand image. Luxury is what is less accessible and more desirable, also through
licensing the brand faced risks of non quality products and knockoffs. In the moment,
the brand was struggling, even though licensing might have given a revenue boost, it
would have been difficult to have checked on the image of brand. As a conclusion,
taking back the licences allowed a better control of the brand image and enabled the
company to design its products with an inhouse team and to control manufacturing.

What were YSL key success factors before and after 1990? Why did public
interest drop?
Key factors before 1990:
 Modernizing women by designing clothes with similar dress styles and codes
as man, yet with a more feminine appearance (caban and trench coat). 1962:
the saharienne, 1967: tailleur pantalon, 1968: jumpsuit
 Expanding the creative repertoire including fashion for men and RTW line.
 Targeting new trends that focussed on less affluent shoppers, providing high
fashion dresses to all women regardless of wealth and status.
Key factors After 1990:
 Directly operated stores. Disarrangement allowed full control over store
operations, presentation, service and pricing, as well as the range of products
available and sold. It reduced the vulnerability to the parallel market.
 Returning to the haute couture business with new products
 Reviving the RTW business.
The public interest dropped because of the global competition in the fashion and
luxury industries, this caused the brand image of YSL to deteriorate. Due to lack of
financial resources, YSL was unable to invest in new strategies and to exploit its
creative potential.
Key learning:
Given the competition and the forecasted growth of fashion industry, each brand has
its own ups and downs. YSL has seen multiple strategies and creative directors
before it became successful. For a brand to be successful, both organizational
structure and creativity is important. If the Creative director is not able to capture the
market, the customers will not buy it, same for the operational and organizational
structure, if the management is not able to put the right products in the right market,
the sales will decline.
Even though Yves Laurent was extremely talented and creative, the brand under him
saw a unsustainable growth, when PPR acquired wanted to build their empire of
luxury brand, they chose YSL as it was already under spotlight, and people look upto
new reforms. It entices their interest.
Another key learning is that a strong brand equity is not easily dissolvable if the
Creative Director is able to push his creativity. PPR’s decision to give Slimane
freedom to recreate the brand shows the importance that luxury brand gives to their
creative directors as in the end, a unusual reform can only be brought by creativity.