PARIS — Pinault-Printemps-Redoute will continue to streamline its profile by divesting its business-to-business division and concentrating on its higher-margin luxury and retail activities.
Serge Weinberg, chairman of the diversified retailer, which holds a 55.2 percent stake in Gucci Group, said in a conference call on Thursday that PPR has begun “redeploying” the group to make it “clearer and easier to understand.”
PPR’s far-flung holdings span from luxury and retail to electronic components and wood.
Weinberg’s remarks came as PPR reported a 1.5 percent decline in 2002 sales to $28.74 billion, in line with analysts’ expectations. Dollar figures are converted from the euro at current exchange rates.
Weinberg said PPR had seen a “very marked improvement in business, notably in retail” in the fourth quarter, when overall sales rose 1.7 percent on a comparable basis. Sales had declined in the three previous quarters.
Excluding currency fluctuations, PPR said sales fell 0.5 percent in 2002.
Sales at the retail division, including the Printemps, Fnac and Conforma stores, increased 0.9 percent to $4.04 billion for the year, bolstered by a 3.5 percent increase in the fourth quarter.
Sales at Gucci Group increased 0.8 percent on a comparable basis to $2.66 billion, reflecting numbers already reported by Gucci.
The group’s weakest performer was the B2B division, which reported a 4.2 percent decline in sales to $12.6 billion. In recent months, PPR has divested several B2B holdings, including its Finaref and Facet consumer credit divisions and its Guilbert office supplies supplier.
“The reconfiguration process will be completed by the end of 2004,” said Weinberg. “When it is complete, we will have one type of client, which will strengthen the group.”
Weinberg said more details on the strategy would be provided when PPR reports profits on March 5. French firms traditionally report sales and earnings separately.
Meanwhile, Weinberg said PPR would continue to incrementally bolster its majority stake in Gucci. PPR has pledged to buy all of the shares of Gucci it doesn’t own in 2004 for $101.5 a share, but, according to that agreement, PPR can buy up to 70 percent in Gucci before the end of the current year.
This story first appeared in the January 17, 2003 issue of WWD. Subscribe Today.
In recent months, as reported, PPR has added more than 2 percent to its stake in Gucci by buying shares on the open market. Purchases made on Wednesday lifted its stake to 55.2 percent of the luxury house.