St. Laurent Stock Offering Halted; It’s Too Fashionable

PARIS — The flotation of shares in French fashion legend Yves Saint Laurent was postponed Thursday after so many would-be investors rushed to buy a stake that the offering was oversubscribed.

The shares offered in Groupe Yves Saint Laurent, the first French fashion house to seek a stock exchange listing, were more than 250 times oversubscribed, broker Francois Dufour-Kervern said.

The issue, representing slightly more than 10% of YSL’s share capital, was rescheduled for Monday.

The offer price of $133 would remain, but investors would be required to place deposits equal to the number of shares requested to prevent speculative bids, Dufour-Kervern said.

“A lot of people have put in for 100 times what they wanted, and there will be a lot of withdrawals next week,” one British analyst predicted.

But Thursday’s enthusiastic reception was a good start for company Chairman Pierre Berge’s decidedly cautious venture on the Bourse, carefully publicized beforehand with full page advertisements in French and international newspapers.

Berge hopes to protect the company from takeover bids and avoid the kind of bitter power battle seen at luxury group LVMH Moet Hennessy Louis Vuitton.

“I was directly inspired by what had happened at LVMH,” Berge said in a recent interview. “LVMH for me was an example of how not to do things, and I studied what had happened there in order to do exactly the opposite.”

LVMH’s ambitious new chairman, Bernard Arnault, is admired as a brilliant financier, but some doubt his ability to safeguard the group’s reputation for quality.

Industry Changing

“In general, raiders are financiers who don’t know anything about our profession and don’t understand the culture of the luxury products profession,” Berge said.

The YSL flotation is regarded as a sign of things to come in the increasingly competitive French fashion world. Family-run fashion houses are being rapidly bought out by entrepreneurs with their eyes on exploiting their reputations more profitably.

The special structure adopted allows Berge to choose a successor to himself and to Yves Saint Laurent, whose creative work is the inspiration behind the company.

Berge and Saint Laurent have worked together since 1961, when the young designer emerged from under the mantle of his mentor, the late Christian Dior.

The 52-year-old Saint Laurent, who has reportedly been quite ill lately, is still the undisputed king of French fashion, although 85% of the $406-million sales last year were in perfumes.

The YSL group, which had a 1988 net profit of $9 million, has been undergoing reorganization since buying back most of its perfumes business from U.S.-based Charles of the Ritz in 1986.

But it needs the cash from the flotation and from a recent $187-million capital increase to cover debts incurred by buying out most of the YSL stake held by Italian financier Carlo De Benedetti.

Benedetti’s holding company Cerus cut its 49.9% stake in YSL to 15% in June.

YSL aims to use the new injection of cash to strengthen its international presence, particularly in North America and Southeast Asia. Accessories are another priority, with a range of new boutiques planned in Paris, New York and other capitals.