PARIS — French retail-to-luxury group PPR said it has entered into exclusive negotiations with South Africa’s Steinhoff International Holding Ltd. for the sale of furniture chain Conforama for 1.2 billion euros, or $1.58 billion at current exchange.
Under the terms of the deal, Steinhoff would also take over Conforama’s debt to PPR, an undisclosed sum.
“This planned cession to a global furniture sector player is a major strategic opportunity for Conforama,” PPR chairman and chief executive officer François-Henri Pinault stated. “Steinhoff International has an intimate understanding of Conforama’s business and the two companies operate in complementary markets.”
PPR has said it wants to sell its retail assets, including music, books and electronics retailer Fnac, in order to fund expansion in the lifestyle segment, which should eventually dwarf its luxury division, Gucci Group.
With 41,000 employees, Steinhoff is already one of the largest furniture and household goods suppliers in Europe and had been looking to reinforce its position in France and other territories.
Natixis analyst Boris Bourdet estimated Conforama’s debt at roughly 400 million euros, or $529 million, which would bring the total purchase price to around 1.6 billion euros, or $2.12 billion.
PPR chief financial officer Jean-François Palus declined to put a total value on the deal, but said the group was fully satisfied with the offer. “It is above the figures that have been quoted here and there,” he said on a conference call.
Conforama posted sales of 821.2 million euros, or $1.06 billion, in the third quarter of 2010, bringing year-to-date sales to 2.23 billion euros, or $2.94 billion, up 7.5 percent versus 2009. Dollar rates are calculated at average exchange rates for the period in question.
The furniture chain operates 241 stores, of which 190 are in France and the remainder in Italy, Spain, Switzerland, Croatia, Portugal and Luxembourg.
The transaction is expected to be finalized in the next few weeks, after consultations with employee representatives. It will be subject to approval by the general assembly of Steinhoff International and competition authorities.
Other bidders reportedly included private equity firm Carlyle, and a consortium linking Goldman Sachs and Colony Capital, owners of the French furniture chain But, and London-based investment fund Permira, which owns Valentino.
PPR has declined to comment on details of the bidding process.
News of the impending sale fueled renewed speculation that Pinault was interested in buying Californian outdoor sports lifestyle brand Quiksilver. A PPR spokeswoman declined to comment on a report in French financial daily La Tribune stating that PPR had contacted Quiksilver ceo Bob McKnight and private equity firm Rhone Capital, which owns roughly a fifth of the company.
“PPR will take the time to make a purchase in the best conditions just as it is taking the time to make a sale in the best conditions,” she said.
Officials at Rhone Capital declined all comment.
Shares in PPR closed down 1.7 percent at 124.80 euros, or $165.19, on the Paris stock exchange.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast