PARIS — Dramatic swings in international currency markets dampened the first-quarter sales performance at French distribution conglomerate Pinault-Printemps-Redoute.
The firm on Thursday reported first-quarter revenue declined 6 percent to $6.87 billion, compared with $7.3 billion in the year-earlier period. On a comparable basis, however, excluding the effects of currency fluctuation, sales increased 2.8 percent. Dollar figures are converted from the euro at current exchange.
The results slightly bettered analysts’ projections. PPR shares closed up 5.1 percent at $63.49 in trading on the Paris Bourse Thursday.
In a conference call, PPR chief executive Serge Weinberg trumpeted the comparable revenue advance.
"The performance in the first quarter was extremely strong, excluding the strong negative impact of currency exchange rates," he said. "Retail and luxury are performing."
Weinberg said retail sales at the group, controlled by French billionaire François Pinault, gained 6.1 percent on a comparable basis, led by a 7.5 percent rise at the Fnac book and music chain and a 5.9 percent advance at the Conforama furniture retailer.
Sales at the Printemps department stores gained 1.9 percent, hurt by weak international travel flows linked to the situation in Iraq. Printemps’ Paris flagship on the Boulevard Haussmann, heavily reliant on tourist sales, finished the quarter with a 4.5 percent decline in revenues.
The sports division, comprising the Citadium megastore in Paris and 18 Made in Sport stores throughout France, grew 9.4 percent in the quarter.
Sales at the Orcanta lingerie chain grew 12.6 percent.
Luxury sales through Gucci Group, in which PPR has a 61 percent stake, gained 0.3 percent, or 6 percent on a comparable basis, to $778.6 million.First-quarter sales at Gucci correspond to the period from November 2002 through January 2003 and were reported previously.
Weinberg said the solid performances of the retail and luxury divisions justified PPR’s new strategy to shed its business-to-business activities, including office, electrical and construction supplies divisions, in favor of higher-margin retail and luxury businesses.
B2B sales declined 2.8 percent on a comparable basis to $2.55 billion, a performance Weinberg characterized as "weak."
As reported, PPR said last week it would sell its Guilbert office supplies division to America’s Office Depot for $863.9 million in cash. Meanwhile, the company is said to be in talks to unload the Pinault Bois Materiaux company, a wood and construction supplies concern."We are moving ahead in our strategy to concentrate on a single customer," said Weinberg. "We are executing probably more rapidly and in better market conditions than most people probably expected."
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