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Dressed in a black cardigan, cream blouse and black pants, Hermann said she viewed overcoming the deficit as a personal challenge, with no easy solutions but to make YSL a go-to fashion brand.
“It was a reality, so we had to cope with it,” she said. “What makes you successful is when the customer buys your clothes. I didn’t want to reach breakeven by endangering the development.”
Cost controls were vigilant, and there was some retrenchment. YSL shuttered boutiques in Brussels, Capri, the Americana in Manhasset, N.Y., and “right-sized” the Manhattan flagship on Madison Avenue.
But there were investments, too. Budgets were increased for sample collections, product development and communications. In total, 100 employees were added over a four-year period, Hermann said.
As gratifying as reaching breakeven is, Hermann characterized it only as a “first step. It’s not enough,” with the goal being to reach a double-digit level of profitability consistent with other European luxury brands. “We have so many things to do.”
Pilati agreed. “It is a milestone, but it is at the same time just a signal of the beginning,” he said. “We have an ambitious path ahead, and we are determined to continue and improve our profitability.
“YSL should continue to be a brand of distinction,” he continued. “It’s about focus: focus on technique and mastery in design and delivering unique proposals to the marketplace. Then of course there are objectives to grow responsibly the sales and network of the company, to more fully realize its potential.”
Looking ahead, Hermann said YSL would likely expand e-commerce to Europe after a promising launch in the U.S. She also spies “huge potential” for the brand in men’s wear. “I think Stefano has a real vision for men,” she said.