PARIS — Pinault-Printemps-Redoute, the diversified retailer with a majority stake in Gucci Group, on Tuesday confirmed it’s in negotiations to sell its financial services arm, Finaref, a move that would significantly ease its $6 billion...
PARIS — Pinault-Printemps-Redoute, the diversified retailer with a majority stake in Gucci Group, on Tuesday confirmed it’s in negotiations to sell its financial services arm, Finaref, a move that would significantly ease its $6 billion debt load.
Meanwhile, the company, with interests in everything from timber to department stores, reported a 1.6 percent decline in third-quarter revenue to $6.23 billion, compared with $6.33 billion in the corresponding period last year.
Sales for the nine-month period ended Sept. 30 dropped 1.5 percent to $19.4 billion, largely on par with analysts’ expectations. Dollar figures are converted from the euro at current exchange rates.
When reports of a possible Finaref sale emerged over the weekend, French bank Credit Agricole was said to be the front-runner to acquire it. Jean Laurent, Credit Agricole chairman, confirmed separately on Tuesday the bank’s interest in Finaref, France’s third-largest consumer credit group. Finaref’s value is estimated at about $3 billion.
On a conference call to discuss third-quarter results, PPR chairman Serge Weinberg said that the group eventually wants to divest itself of all financial service activities. He said a sale would "make sense" and mirror other distribution groups whose credit operations are handled separately by outside banks.
Although Weinberg declined further comment, an eventual deal would calm investor concern over PPR’s liquidity and, in particular, its commitment to pay $4.8 billion in 2004 for the 47 percent of Gucci it does not already own.
Earlier this year, Weinberg indicated that PPR would slowly reconfigure its profile, reducing its business-to-business activities in favor of higher-margin retail and luxury businesses.
In a preliminary step in that direction this August, PPR sold the mail-order subsidiary of Guilbert, its office supplies distributor, to Staples Inc. for $808 million. Weinberg has also hinted that Rexel, the electrical equipment retailer, could be sold.
Meanwhile, Weinberg said sales began to improve at most of its divisions in the third quarter.
"Seeing what we see, there should be a recovery in profitability [for the rest of the year] compared to the first half," said Weinberg. "But it’s difficult to measure due to our cautious position."Sales in the retail division, which includes the Printemps department store, the Fnac music and book chain, and the Orcanta lingerie stores, increased 1.2 percent to $2.64 billion during the quarter.
Revenues in its business-to-business arm dropped 3.5 percent to $2.83 billion, while those at the credit and financial services division declined 0.5 percent to $194 million.
At Gucci Group, the firm’s luxury goods division, sales declined 3.9 percent to $559.8 million, corresponding to revenues already reported by the Italian firm for its quarter ending July 31.
PPR, like other French firms, reports profits only after the second and final quarters of the year and posts revenues on a quarterly basis.
PPR stock closed down 4.5 percent to $69.50 in trading on the Paris Bourse.
Breaking: @cushnieetochs’ co-founders @carlycushnie and @ochsmichelle are parting ways. After a 10-year run, Ochs is leaving the brand. Get the full story on WWD.com – link in bio. #wwdnews #wwdfashion
@maybelline’s Kanako Takase had snow bunnies in mind when creating the beauty look for @philipppleininternational. Playing off of the bedazzled snowboards in the collection, Takase mixed two highlighters together for a luminous sheen. #wwdbeauty #nyfw (📷: @jilliansollazzo)
“There’s a huge gap between the old way of doing things and today. It takes the youth to help evolve that. You have to count on the kids today to help lead you into the future. A lot of these retailers are stuck in the past. Communication is the biggest thing,” said @ronniefieg of @kith on the youth’s role in retail. On Monday night, Jeff Staple moderated a keynote session with Fieg and @syresmith at Assembly - a series of workshops, talks and keynotes addressing topics or issues in the apparel industry. Head to WWD.com to read more advice from Fieg and what Smith thinks of his dad @willsmith’s Instagram account and sustainability (📷: @weston.wells)
@joansmalls closed the @michaelkors fall 2018 show in black sequined pants and a varsity T printed with 19 on the front and 81 on the back. 1981 – the year Kors went into business. #wwdfashion #nfyw (📷: @giovanni_giannoni_photo)
“You think your life is going to be a certain way, and nothing you thought would happen ends up happening. Never in my wildest dreams did I think I’d be designing clothes and working with Mickey Drexler, and building something I’m deeply proud of,” said Jenna Lyons. Nine months after leaving @jcrew, Lyons is exploring the meaning of happiness. Read the interview, where Lyons talks about reinvention and more on WWD.com – link in bio. #wwdfashion (📷: Farrell) #jennalyons #jcrew