Although PPR recently announced a 7.9 per cent increase in the group's sales, up from €4.43bn in 2005 to €4.10bn for the first quarter of 2006, the results for YSL proved the exception to the company's underlying strong performance, a reoccuring problem in the last year.
The group reported that sales for its YSL Beauté division grew by 0.7 per cent, signifying that the business is falling behind others that are operating at a far more profitable rate.
Indeed, the group's Yves Saint Laurent business, which focuses on clothes and accessories, reported an 8 per cent rise in first quarter sales, a figure that was particularly boosted by new collections.
Last month PPR presented what it termed a 'relaunching plan', which aims to reorganise YSL Beauté's services and industrial activities in an effort to bring the division's performance in line with other areas of its business.
The company says that 'YSL Beauté has to be more responsive to and more innovative in meeting market needs and create a stronger investment capacity to support its brands'.
The plan will involve the resizing the services of its headquarters in Neuilly sur Seine, on the North-West fringes of Paris, and consolidating its industrial activities in Lassigny, 100km North of Paris.
The group says that the proposed restructuring will improve operations, as well as decision-making and management processes resulting in the business being closer to the markets.
The plan will also lead to around one third of the company's production staff at its Bernay plant losing their jobs, leaving a workforce of approximately 224 staff. A total of 163 production and admin staff are expected to be made redundant.