PARIS — France’s Pinault-Printemps-Redoute on Tuesday gave more evidence that Europe’s luxury firms are enjoying hearty growth, reporting double-digit sales increases at its Gucci Group division in the two months since the departure of its star management and design duo, Tom Ford and Domenico De Sole.
Serge Weinberg, PPR’s chief executive, said sales at Gucci gained 17.7 percent on a comparable basis in May and June. “We are moving in the right direction,” Weinberg said in a conference call, commenting on PPR’s first-half sales, which fell 6 percent to 5.61 billion euros, or $6.89 billion, deteriorated by adverse currency translations and restructuring costs. Figures have been converted at average exchange rates for the corresponding periods.
From February though April, Gucci Group’s sales rose 4.9 percent to 595 million euros, or $731.7 million. At constant exchange rates, sales grew by 10.5 percent.
Gucci brand sales gained 4.6 percent to 334.7 million euros, or $411.6 million, while Yves Saint Laurent advanced 14.5 percent to 37.6 million euros, or $46.2 million. Bottega Veneta surged 48.1 percent to 21.8 million euros, or $26.8 million.
Sales at Sergio Rossi, the shoe house, rose 3.5 percent to 20.4 million euros, or $25.1 million. Gucci also runs the Boucheron jewelry business, Bedat & Co. watches and the fashion houses of Alexander McQueen, Stella McCartney and Balenciaga, all of which made “excellent headway,” PPR said.
By zone, Gucci Group’s highest comparable-sales gains were logged in America (19.1 percent), Asia (11.8 percent) and France (14.2 percent). Sales in the rest of Europe excluding France increased 4.9 percent.
Weinberg cited “exceptional” responses to the first post-Ford cruise collections by Gucci’s women’s wear designer Alessandra Facchinetti and Yves Saint Laurent’s Stefano Pilati, two of Ford’s underlings.
He said orders for their collections had surged 50 percent in the U.S. and 100 percent in Europe. He added that the response had been “positive” to John Ray’s debut men’s collection at Gucci, shown on the Milan runway in June, as well as to accessories created by Frida Gianni.
Pilati and Facchinetti both will make highly anticipated formal runway debuts in front of the critical press this fall.“Recent sales trends and the positive response to Gucci Group’s latest collections further bolster our confidence in the brand portfolio and teams at Gucci Group, as well as the organizational decision we have made,” Weinberg said.
Nonetheless, some analysts expressed disappointment with Gucci’s performance.
“The numbers were below what people were expecting because De Sole parted with such bullish comments,” said Elisabeth Jamieson, analyst at Lehman Brothers in London. Jamieson said Lehman expected comparable growth of 15 percent in the quarter.
Though Weinberg said little on potential strategy changes at Gucci Group, he did hint at certain modifications already set in motion at YSL, including the realignment of prices and merchandise. He said more daywear would be introduced at a broader range of prices, adding that the brand would not open new stores until it optimized its current network.
He declined to comment on when the brand could become profitable, saying only that more progress had been made “sooner than I expected three months ago. YSL has enormous potential.”
A more complete three-year strategy statement will be made by yearend by Gucci’s new ceo, former Unilever executive Robert Polet, Weinberg said.
Meanwhile, he plugged YSL Beauté’s upcoming launch in September of Cinemá, the first post-Ford fragrance. “It has been well received by professionals,” Weinberg said. “[YSL Beauté] will have a stronger second half.”
YSL Beauté’s sales increased 3.2 percent to 145.3 million euros, or $178.7 million, in the February to April period.
Overall, PPR’s sales were broadly in line with analysts’ consensus expectations and the stock was up 0.7 percent to close at 80.80 euros in trading on the Paris Bourse.
Through the first six months, PPR, whose far-flung interests range from department stores to catalogues, stood at 11.37 billion euros, or $14 billion, which was down 7.4 percent.
Weinberg said the so-called “new PPR,” or the company’s retail and luxury businesses, had posted a 4.9 percent gain in the second quarter to 3.91 billion euros, or $4.8 billion.
Rexel, the electronic components firm that PPR said it intends to sell by yearend, saw sales improve 2.3 percent to 1.71 billion euros, or $2.1 billion.Weinberg said the retail division’s sales gained 5.1 percent to 3.31 billion euros, or $4.06 billion, boosted by a good performance in France. Sales at the Conforama home store reported a 6.1 percent gain and the Fnac music and book chain gained 8.3 percent.
Sales at Printemps department stores increased 8.2 percent, as tourists returned to the firm’s Paris flagship on the Boulevard Haussmann. Meanwhile, the Redcats mail-order division fell 0.1 percent.
PPR also runs the CFAO African trading company, whose sales increased 7.4 percent to 464.9 million euros, or $570.9 million.
Like most French firms, PPR reports earnings and revenues separately. It is slated to give profits on Sept. 15.
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