PARIS — PPR, the French conglomerate controlled by billionaire François Pinault, said strength at Gucci Group and the acquisition of Puma propelled third-quarter sales ahead 21.9 percent.
Sales in the three months through Sept. 30 reached 5.19 billion euros, or $7.13 billion, from 4.26 billion euros, or $5.43 billion, a year ago, inflated by revenue generated from Puma, in which PPR bought a 62.9 percent stake for 3.33 billion euros, or $4.57 billion. Currency conversions were made at average exchange rates for the respective periods.
On a comparable basis, group sales advanced 6.8 percent, led by 10.5 percent growth at luxury division brands, which include Gucci, Bottega Veneta and Yves Saint Laurent.
Jean-François Palus, PPR’s chief financial officer, said on a conference call there was no slowdown in luxury despite recent turbulence in financial markets and the continued slide in the value of the dollar and yen against the euro.
Palus said luxury sales trends in October were in keeping with third-quarter figures. “So far, so good,” he said.
The numbers beat most analysts’ expectations and further suggested Europe’s key luxury players are managing to stiff-arm recent financial market turmoil and the subprime meltdown in the U.S. Last month, LVMH Moët Hennessy Louis Vuitton, the world’s biggest luxury group, said its sales in the third quarter accelerated 10.3 percent.
Unlike LVMH, though, PPR did not highlight an improvement in business in Japan. Palus was quick to underline that sales in the Asia-Pacific region outside of Japan — which grew 26 percent in the quarter — now account for 18 percent of PPR’s total luxury sales, ahead of Japan’s 13 percent contribution. Palus said sales in China exploded 113 percent in the quarter.
Elsewhere, luxury sales gained 18 percent in Europe and 10 percent in America. “There are favorable dynamics for luxury everywhere outside of Japan,” he said.
The Gucci brand reported sales gained 4.8 percent to 539.9 million euros, or $741.8 million, thanks to double-digit growth in sales of ready-to-wear and footwear. Leather goods sales advanced 8.8 percent. Turnaround efforts in the brand’s timepiece category continued as the collections move more upscale. Jewelry sales grew 11 percent in the quarter, boosted by the advertising link with actress Drew Barrymore.
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Palus said efforts to buttress Gucci in Japan had yet to bear considerable fruit and that the brand was continuing to move its products more upmarket. He said a more “distinctive store approach” and limited editions were other solutions to achieve better business in Japan.
Bottega Veneta said sales in the quarter jumped 39.2 percent to 96.4 million euros, or $132.4 million. Sales of leather goods, which account for 80 percent of the brand’s revenues, improved 44 percent as all geographic regions contributed high double-digit growth.
Money-losing Yves Saint Laurent saw revenues improve 15.7 percent to 61.4 million euros, or $84.4 million, thanks to strong momentum in Europe and North America, where sales advanced 31 and 23 percent, respectively. YSL launched an e-commerce site in the US in the quarter.
YSL Beauté’s sales gained 4.5 percent to 164.2 million euros, or $225.6 million, spurred by the new YSL fragrance Elle, while sales at the so-called other brands — Alexander McQueen, Stella McCartney, Balenciaga, Boucheron (which launched its own e-commerce site for Europe) and Sergio Rossi — jumped 25.3 percent to 140.2 million euros, or $192.6 million. Palus cited robust performances at Stella McCartney, Balenciaga and Boucheron as driving factors.
Meanwhile at Puma, which PPR now integrates into its reporting schedule, sales in the third quarter declined 0.5 percent to 670.4 million euros, or $921.1 million, as footwear business in the U.S. proved difficult in mall-based stores.
Conversely, Puma’s own retail outlets saw sales accelerate double digits in the period.
PPR’s stock lost 1.3 percent to close at 129.83 euros, or $189.29 at current exchange, in trading on the Paris Bourse.