By  on November 1, 2005

PARIS — Building, not cutting.

That's the mantra of Valerie Hermann, the energetic new chief executive of Yves Saint Laurent, who plans to keep investing in product teams, advertising and even the occasional new boutique despite steep losses at the storied French fashion house.

"I'm here to develop products and communications, supported with the right organization," she said. "We are in a phase where we will put the accent on development, on building the turnover."

In her first interview since joining the Gucci Group-owned fashion house last March, Hermann revealed plans to accelerate growth in leather goods, enter the costume jewelry category, add two new "capsule" clothing deliveries a year and broaden the price and range of key categories such as knitwear and leather goods in order to attract new customers.

However, she allowed there are no quick fixes for the brand, and obstacles include a network of gloomy stores that are "a real problem for us. We are putting our customers in the dark."

Not one to mince words, Hermann also acknowledged the daunting feat of doubling sales at YSL to about $400 million, the key prescription for reaching profitability outlined by her boss, Gucci Group chief executive Robert Polet. "I like challenges and [YSL] was a major challenge," Hermann said, explaining her reason for taking the job. "The one who is putting the most pressure on me is myself."

Sure signs of a turnaround have been elusive. Last week, Gucci Group parent PPR said YSL's sales slipped 5.1 percent to 45.6 million euros, or $55.6 million at average exchange, in the third quarter, reflecting poor or late deliveries of shoes and leather goods.

Hermann vowed that any lingering supply-chain and logistics issues would be resolved. And looking ahead, she asserted "there is fantastic potential" given YSL's rich heritage, its "magical" brand name and the design prowess of Stefano Pilati, whom she says finds great reward in seeing real women wear his clothes and carry the brand's handbags.

To that end, Pilati is making his first retail appearances in the U.S., with a cocktail party tonight and a trunk show Wednesday at Bergdorf Goodman in New York, along with another trunk show on Friday at Neiman Marcus in San Francisco.

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