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An Inside Look at PPR

PARIS — Although Pinault-Printemps-Redoute has become best known for its majority stake in Gucci Group, the retailer remains a multinational conglomerate of widely divergent interests ranging from credit services to wood and building materials....

PARIS — Although Pinault-Printemps-Redoute has become best known for its majority stake in Gucci Group, the retailer remains a multinational conglomerate of widely divergent interests ranging from credit services to wood and building materials.

This story first appeared in the September 9, 2002 issue of WWD.  Subscribe Today.

In fact, French tycoon François Pinault, who holds a 42.2 percent stake in PPR and controls 55.4 percent of voting rights via his Artemis family holding company, built much of his early fortune with his family-owned Pinault Bois & Materiaux wood and construction supplies company.

As indicated in the recently published 2001 annual report, the $2.52 billion in sales from Gucci last year accounted for just 9.1 percent of PPR’s total sales of $27.52 billion.

Meanwhile, PPR’s business-to-business division — including Pinault Bois, the CFAO African export company, and the Rexel electronic components wholesaler — accounted for 45 percent of the group’s total. Together their sales tallied $12.39 billion.

PPR’s retail division top performers are the Fnac music and book chain and the Conforama furniture stores. Together, they accounted for 52.2 percent of the retail division’s $11.83 billion in sales. The Redcats mail-order business, which includes Brylane in North America, accounted for 40 percent of the division’s sales, while the Printemps department stores contributed 7.5 percent of the total. Dollar figures are converted from the euro at current exchange rates.

Last week, PPR hired Denis Olivennes, the former chief operating officer of Canal Plus, Vivendi Universal’s French pay-TV unit, to be second in command to chief executive Serge Weinberg. In this newly created post, he will be responsible for looking after the group’s brands and relationships between them.

Olivennes arrives at a key time for the group. PPR’s stock has lost almost 45 percent of its value on the Paris Bourse since January. Financial markets have questioned the group’s widely diversified strategy and heavy debt load.

There has also been speculation that PPR will slowly reduce its business-to-business activities in favor of retail and luxury, which boast higher profit margins. Last month, it sold the mail-order subsidiary of Guilbert to Staples Inc. for $808 million.

At that time, Weinberg was quoted as saying that PPR would slowly reconfigure the profile of the group. Olivennes could be a key architect in this.

Meanwhile, French press reports have cited rumors that PPR is shopping around Rexel. Weinberg Thursday declined all comment on the matter.