Excluding fragrance and cosmetics, YSL had $88 million in revenue, with royalties
accounting for 64%, and an operating margin of 1%.The company held 167 contracts with licensees,
for products ranging from apparel to lighters and pens. In addition, YSL owned a small DOS
network, with 11 stores in Europe and two in the United States, while wholesale distribution
generated a few million dollars a year. While Gucci would own YSL’s ready-wear assets (which
consisted largely of its licensing contracts) and the name, Artemis agreed to retain the haute couture
part of the business. In addition, in February 2000, in a separate deal, the newly renamed YSL
Couture bought Mendès, the French company that had produced and distributed women’s ready-towear
for YSL since the late 1960s. With Mendès, YSL Couture recovered control of women’s readyto-
wear and took over three factories with 650 employees, together with 11 directly operated stores
and a contract with an independent distributor in Japan