By  on October 28, 2005

PARIS — Driven by lusty demand for leather handbags and shoes, luxury goods sales at PPR advanced 11.6 percent in the third quarter to 784.7 million euros, or $957.7 million, a 15.3 percent gain in organic terms.

The French conglomerate's results signaled continued momentum for high-end products, particularly in North America and Asia, and also strength in the discount channel. Sales at PPR's far-flung retail activities were up 5.1 percent in the quarter ended Sept. 30 to 3.43 billion euros, or $4.18 billion, boosted by sharper pricing at the discount Conforama furniture chain.

"It's been a good quarter. We are in good shape as we enter the final months of the year," an upbeat François-Henri Pinault, PPR chairman and chief executive officer, told analysts during a conference call on Thursday. "We are confident that the end of the year will be very good for our luxury brands."

While Yves Saint Laurent sputtered in the quarter, Pinault noted that Balenciaga is on track to break even this year and be profitable in 2006. He also anointed fast-growing Bottega Veneta as a "true luxury goods powerhouse."

Overall, group sales increased 6.3 percent to 4.21 billion euros, or $5.13 billion, a 7.5 percent rise excluding the impact of exchange rates and other factors. Currency conversions were made at average exchange rates for the period.

PPR said growth in luxury was driven by categories with the highest margins, with leather goods up 29.1 percent and shoes leaping 19 percent. By region, sales jumped 28.1 percent in Asia-Pacific and 21.2 percent in North America.

And in a veiled jab at rival group LVMH Moët Hennessy Louis Vuitton, Pinault boasted that sales of fashion and leather goods in the quarter were up 21.4 percent to 508 million euros, or $620 million. That is how diversified LVMH groups its business units. LVMH recently reported a 12 percent rise for that division in its third quarter.

For PPR, sales at the cash-cow Gucci brand advanced 13.4 percent to 459.3 million euros, or $560.6 million, in the quarter, with the company citing strength across all product categories and double-digit gains in all geographic regions. Sales of leather goods advanced 23.9 percent, with the upscale leather line La Pelle Guccissima a standout.

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