PARIS — French luxury and retail conglomerate Pinault-Printemps-Redoute is in good financial shape to acquire the Gucci Group shares it doesn’t own when its so-called put comes due next year — even as the total price of the Italian...
PARIS — French luxury and retail conglomerate Pinault-Printemps-Redoute is in good financial shape to acquire the Gucci Group shares it doesn’t own when its so-called put comes due next year — even as the total price of the Italian giant surpasses $8 billion — chief executive Serge Weinberg told investors at an annual shareholder’s assembly here Thursday.
Facing heavy debt, which stood at about $6 billion last month (converted from euros at the exchange rate), PPR has been selling many of its non-core holdings in preparation to buy the remainder of Gucci next year. Over the past year, its financial services arm, wood business and office supplies distributor have all been shed, generating some $3.8 billion.
A successful bond issue last week pumped an additional $1 billion into PPR’s balance sheet. As a result, Weinberg said the company is no longer pressed to sell its electronic parts distributor, Rexel.
“We don’t need to sell Rexel to finance the Gucci put,” said Weinberg. “We can wait until market conditions improve and the company is no longer pressed to sell its electronic parts distributor, Rexel.
“We don’t need to sell Rexel to finance the Gucci put,” said Weinberg. “We can wait until market conditions improve and the company restructures to make itself more attractive.”
PPR has engaged in a vast strategic realignment, moving away from its business-to-business activities in favor of its higher-margin retail and luxury activities. Weinberg said that focusing on the “retail client” would remain the group’s main priority.
Meanwhile, he trumpeted luxury as a long-term motor for profit growth, even as the market has suffered in the wake of SARS, the war in Iraq and the threat of terrorism.
He singled out growth at YSL and Bottega Veneta, the latter of which Weinberg said has continued to perform “strongly” despite the world situation.
PPR currently owns 63.28 percent of Gucci and it can acquire as much as 70 percent of the firm on the open market before the end of the year. After that, PPR has committed to paying $101.50 a share for the rest of the company, or an expected total of $3.6 billion.“When all’s said and done, the price for Gucci will be $8.16 billion,” said Weinberg, adding that the sum represented good value since Yves Saint Laurent, Bottega Veneta, Balenciaga and Boucheron have “incredible potential” for global development.
Weinberg said YSL should turn a profit in 2005.
Overall, PPR said it would begin to slow investments this year after allocating almost $1 billion in 2002 to building brands. About $115 million will be shaved off that sum incrementally over the next two years.
As reported, PPR’s operating income slid 7.7 percent to $2.09 billion last year compared with $2.27 billion in 2001. Net sales fell 1.5 percent to $31.48 billion.
Meanwhile, in related news, Artemis, the holding company through which François Pinault controls PPR, on Thursday said it would launch a $517.5 million bond issue convertible in shares of Bouygues, in which Artemis has a 7.8 percent stake.
Artemis said the issue would lighten its balance sheet and prolong the maturity of its debt.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast