PARIS — Kering, already hit by slowing demand for luxury, said Wednesday that its planned disposal of La Redoute and one-off charges at Puma would send its net income “down very significantly” in 2013 versus a year ago.
It is understood Kering plans to inject hundreds of millions of euros to recapitalize La Redoute before selling the struggling catalog retailer.
Kering said members of its board of directors met on Wednesday to examine offers for La Redoute and would announce its conclusions “soon.” It is understood the two potential buyers are an Anglo-Saxon investment fund and a French industrial player with real estate and retail interests.
“Kering plans to select the best option that will continue transforming La Redoute and ensure its future and development, in the interests of the company, its employees and the region where it is based,” the company said.
As reported, the disposal of La Redoute, expected to be accompanied by “significant” job losses, has unleashed a maelstrom of criticism in France, beset by high unemployment and moribund economic growth.
Earlier this week, Kering disclosed it has invested more than 400 million euros, or $535 million at current exchange rates, over the past five years in La Redoute.
The company, controlled by France’s Pinault family, is selling La Redoute as part of a broader plan to exit retail to focus on fashion and accessories in the luxury and sport/lifestyle segments.
The French parent of Gucci, Bottega Veneta, Boucheron, Alexander McQueen, Volcom and other brands had not given precise guidance for 2013 results andunderlined that the factors are non-recurrent and don’t impinge on its “confidence in the solidity of its operating performance for the year.”
As reported, the one-off, mainly non-cash charges at Puma amount to about 130 million euros, or $174.3 million at current exchange, to be booked in the fourth quarter.
Kering is expected to report full 2013 results in mid February.
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