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.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
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Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
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