PARIS — For the past 50 years, the fashion business directed most of its efforts towards some 800 million consumers in the wealthiest regions of the world: the U.S., Western Europe and Japan.
Training its sights on the next half a century, PPR spies a broader world as demographics and economic development promise to deliver some 3 billion young and affluent consumers from such emerging nations as China, Indonesia, Mexico, Brazil and Russia.
So says PPR chairman and chief executive officer François-Henri Pinault, who hosted a press day on Thursday with his top managers to elaborate on the French group’s transformation from a retail-to-luxury conglomerate to an integrated firm focused on apparel and accessories in the luxury and sport-and-lifestyle segments.
“What is at stake in the longer-term, that is to say over the next 50 years or so, is absolutely huge and without precedent in human history,” Pinault said.
This means that PPR has plenty of potential to grow sales, even without acquisitions. In 2011 as a whole, PPR recorded sales of 12.23 billion euros, or $17.03 billion, up 11.1 percent on the previous year. Pinault hopes to triple the size of its core luxury and sport & lifestyle divisions by 2020 and increase revenues to 24 billion euros, or $31.1 billion at current exchange.
He reiterated that the group would look to buy mainly small and medium-sized firms with strong growth potential, saying that one of the areas it was interested in expanding was the outdoor segment.
“Of course, acquisitions are not going to disappear,” Pinault said. “But they will make a very minor contribution to the group’s growth.”
Group managing director Jean-François Palus noted that Balenciaga has multiplied in size by 11 times since it was acquired in 2000, with Alexander McQueen growing by a factor of 12 since a majority stake in the London-based fashion firm was purchased later that same year.
PPR will continue to make strategic acquisitions in segments where it is not present — or to achieve a certain business objective, Palus said. To wit: Puma’s 2010 acquisition of the California golf equipment brand Cobra Golf was partly to help the German activewear brand penetrate pro shops, an exclusive yet vital distribution channel in North America, he noted.
“We don’t need acquisitions, so it’s perfectly possible we won’t make any for 10 years. It doesn’t matter,” Palus said. “We would like to consummate acquisitions to speed up our expansion and growth, but if we don’t, we will still deliver growth.”
Questioned about whether PPR might be interested in Lacoste SA, which is embroiled in a family dispute following the surprise nomination last week of Sophie Lacoste Dournel as president of its non-executive board, Palus demurred.
“We don’t get involved in family conflicts,” he said. “Lacoste is a fantastic brand, but it is a bit constrained by its license model.” Palus noted that PPR does not grant licenses for any category of products that it has the know-how to produce in-house. “Certainly, we could take Lacoste. We would be interested if we could have [full control of] everything,” he said.
Todd Hymel, chief operating officer of PPR’s sport and lifestyle division, said Puma currently generates 95 percent of that pole’s revenues, which in 2011 totaled 3.2 billion euros, or $4.5 billion at average exchange rates.
While noting he sees “enormous opportunities for growth in China” for Puma, he accentuated initiatives at its smaller action-sports brands, showing off the first prototypes for Volcom sneakers, which have soles in contrasting colors. The brand recently opened its first stores in Madrid and Barcelona, and will unveil another in the French ski resort of Chamonix later this month.
PPR has recruited a new chief executive officer to drive growth at Tretorn, and should reveal the name later this month, Hymel said, noting the Swedish heritage brand would maintain its focus on rubber-based footwear and guard its tennis roots.
“Tretorn is nowhere near its potential,” he said.
Meanwhile, Electric, a specialist in snow goggles and eyewear, is to unveil a line of helmets for mountain sports, keeping its focus on “premium technical accessories,” Hymel noted.
Palus said PPR was working to fix declining profitability at Puma, saying it would not sacrifice profits to achieve its target of sales of 4 billion euros, or $5.16 billion at current exchange rates, by 2015.
“We are not fanatics,” he said. “In 2015, we won’t be posting higher revenues with lower profits. We will have higher sales with higher profits.”
“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