By  on April 28, 2006

PARIS — Call it the Frida effect.

Boosted partly by “excellent sales” of Frida Giannini’s debut ready-to-wear collection for Gucci, luxury goods sales powered ahead 19 percent at Gucci Group to 846.8 million euros, or $1.02 billion, in the first quarter — yet another bubbly showing for the high-flying sector.

The Gucci brand, experiencing a “boom” in sales in the Asia-Pacific region, posted growth of 18.2 percent to 508.3 million euros, or $611.2 million, in the three months ended March 31.

Reflecting improving household consumption in France, but less buoyancy in its vast retail operations, overall sales at conglomerate PPR rose 7.9 percent to 4.43 billion euros, or $5.33 billion. The retail portion logged a 5.6 percent uptick to 3.59 billion euros, or $4.32 billion. (Dollar figures are converted from euros according to average exchange rates for the period.)

“This quarter is definitely reflecting the good momentum of every quarter last year, the improvement of the economic environment and our growing international activities,” chief financial officer Jean-François Palus told analysts during a conference call Thursday. “We are very satisfied with these figures.”

He also assured that PPR’s far-flung retail chains — selling everything from cars and books to furniture and pharmaceuticals — had “regained traction.”

Meanwhile, he boasted that its leather goods and fashion activities vaulted 25 percent, “outperforming key competitors.”

Gucci said it posted double-digit growth in all geographic areas, including Japan, where sales jumped 10.8 percent. Sales leaped 34.5 percent in the Asia-Pacific, 21.1 percent in North America and 16.7 percent in Europe.

Although Giannini received mixed reviews for her spring-summer 2006 collection of peak-shouldered dresses, cashmere rugby shirts and tomboy-ish pantsuits, sales of women’s rtw posted a 24.3 percent gain to 37.9 million euros, or $45.6 million, the biggest improvement among Gucci’s various product categories.

Sales of leather goods rose 20.2 percent to 294.3 million euros, or $353.9 million, while shoes stepped up 21.2 percent to 70.2 million euros, or $84.4 million. Wholesale orders also vaulted 22 percent, accounting for 29 percent of sales, but Gucci watch sales were described as “disappointing.”Bottega Veneta, which Palus characterized along with Gucci as a key driver of PPR’s luxury division, posted the biggest gain, with accessories and rtw sending sales up 79.2 percent to 58.5 million euros, or $70.3 million. Leather goods — including Bottega’s signature woven bags — accounted for 83 percent of revenues in the quarter.

PPR cited improvements at its money-losing Yves Saint Laurent fashion house.

An 8.5 percent rise in first-quarter sales to 42.4 million euros or $50.9 million, and a 15.5 percent gain in its network of 62 boutiques, “confirms the positive reception given to the collections presented by Stefano Pilati,” PPR said.

Wholesale orders at YSL were up 30 percent and the Muse bag was the brand’s top-performing item in the quarter, Palus said. Still, he declined to give a breakeven date for YSL, reiterating that it would come when the brand achieved annual sales of 300 million euros, roughly double what they are now.

Sales of “other brands” rocketed 37.3 percent to 95.3 million euros, or $114.6 million. These include Balenciaga, Boucheron, Sergio Rossi, Bedat & Co., Stella McCartney and Alexander McQueen. PPR did not break down sales by brand, but Palus highlighted “triple-digit” growth at Balenciaga.

Reflecting competitive pressures, sales at YSL Beauté inched up 1.2 percent to 142.3 million euros, or $171.1 million. PPR characterized the performance as disappointing, with sales down in fragrances and skin care.

Analysts pummeled Palus with questions about the ailing division. He declined to quantify the cost savings of a restructuring plan that will see YSL shed about 160 manufacturing and administrative personnel, but asserted it would produce a “very significant impact at the end of this year and mainly next year.”

Palus also sidestepped a question about PPR’s willingness to dispose of the unit, saying: “We plan to improve the situation at YSL Beauté. This is our major concern right now,” he said. “We think we can achieve far better profitability.”

PPR described retail activities as steady. Long-sluggish France showed signs of improvement, with sales up 3.1 percent on a comparable basis.

Its biggest business, Redcats, posted a 1.2 percent sales gain to 1.07 billion euros, or $1.29 billion. PPR highlighted strong sales of special sizes in the U.S. and Redcats’ children’s and family division.Sales at PPR’s Fnac book, record and electronics chain increased 6 percent to 1.02 billion euros, or $1.27 billion, with Brazil, Spain, Italy and Belgium outpacing its domestic business. At Printemps department stores, sales rose 1 percent to 181.7 million euros, or $218.5 million, while Conforama furniture stores cited a 5.7 percent increase to 755.9 million euros, or $909 million.

Shares of PPR slipped 0.8 percent to close at 103 euros, or $128.23 at current exchange, on the Paris Bourse.

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