- By Region
Demand in emerging markets helped fuel sales growth at the luxury division of PPR, owner of Gucci, Yves Saint Laurent and Puma brands.
The luxury unit – the group’s biggest business – posted a 17.8 per cent rise in like-for-like sales to €1.46bn. PPR said emerging markets account for 40 per cent of the division’s sales.
Francois-Henri Pinault, chief executive who controls the group through Artemis, the Pinault family holding company, said he was “confident” of “another year of brisk revenue growth combined with gains in operating and financial performance”. Mr Pinault is selling the group’s mass market retail businesses to focus on luxury and lifestyle.
Overall PPR reported a 7.9 per cent like-for-like increase in group first-quarter sales. They rose to €3.26bn in the three months to March 31, compared to the same period last year, representing a rise of 15.4 per cent on a reported basis.
PPR is aiming for sales of €24bn by 2020 from its luxury and lifestyle businesses, of which €10bn is to come from Asia.
Gucci sales were up 12 per cent like-for-like while Bottega Veneta, the leather goods brand, reported a 33 per cent rise and Yves Saint Laurent, 40 per cent.
LVMH, owner of Louis Vuitton bags, Dior perfume and Dom Pérignon champagne, last week reported a 14 per cent rise in first quarter sales on a like-for-like basis.
However, the 2.8 per cent growth in the lifestyle division to €887m was driven by a “disappointing” performance in mature markets by Puma, the German sportswear company in which PPR holds a 70 per cent stake.
PPR said the sale of its Redcats catalogue business, was still ongoing. Sales at Redcats, which is categorised as a discontinued business, fell 1.1 per cent to €788m. PPR sold Conforama, the high street furniture retailer, in December 2010 but the sale of Redcats, ongoing since last year, has been held up by the financial crisis.
In February, Mr Pinault said PPR was in talks with about 10 potential buyers – mainly private equity groups. Jean-Francois Palus, managing director, said on Wednesday that: “We will find a solution… the sale is ongoing and will happen when the best interests are matched for all stakeholders.”
PPR also intends also to sell Fnac, the high street book and music retail chain, which reported a 0.8 per cent fall in sales to €916m, due to “tough market conditions.” Fnac will cut €80m of costs this year to cope with the weaker demand.