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Pinault Discusses Fnac, Puma at AGM

Trade union members gathered outside the annual general meeting of French retail-to-luxury group PPR to protest against job cuts.

Protesters outside the annual meeting.

PARIS — Shareholders arriving at the annual general meeting of French retail-to-luxury group PPR on Friday were greeted by riot police, who had been dispatched to the former Paris Bourse to watch over trade union members gathered there to protest against job cuts at books and electronics retailer Fnac.

This story first appeared in the April 30, 2012 issue of WWD.  Subscribe Today.

“I apologize for the inconvenience,” PPR chairman and chief executive officer François-Henri Pinault told those gathered inside the venue. No incidents were reported, and all but a handful of demonstrators had left by the time the meeting ended several hours later.

Fnac has been hard hit by a slowdown in consumer spending in Europe as governments implement austerity plans to tackle mounting debt levels. In January, it said it would cut 500 jobs and drastically reduce spending as part of a plan to generate savings of 80 million euros, or $106 million at current exchange, this year.

Pinault said that PPR remained committed to turning around Fnac. “We continue to invest in a sustained manner in all our activities without exception, and of course, as has always been the tradition within the group, we maintain an exemplary social dialogue with all the group’s unions,” he added.

Likewise, he expressed confidence that sporting goods firm Puma would meet its target of 4 billion euros, or $5.3 billion, in sales by 2015, despite a disappointing performance in the first quarter of 2012. “I promise you that things are going to shift in the right direction,” he said.

Shareholders overwhelmingly approved the payment of a group dividend of 3.50 euros, or $4.87 at average exchange rates for the period, for the 2011 financial year, though one attendee complained to Pinault that the payout was “stingy” in light of PPR’s positive performance.

Group managing director Jean-François Palus noted that PPR bought back around one million shares in 2011. Taking this into account, the returns to shareholders had risen by more than 20 percent last year, he said. Pinault added the dividend level was further justified by the need to limit the group’s debt.

“You have seen in the last few years that things can change in a very violent manner, and it is vital that the group continue to significantly reduce its debt, as it has been doing for the last few years,” he said.

Pinault paid homage to former Yves Saint Laurent creative director Stefano Pilati, saying he made a “significant contribution” to brand sales with hit accessories like the Tribute shoe. Pilati was replaced in March by Hedi Slimane, and Pinault noted there was a lot of room for growth in ready-to-wear at YSL.

Questioned about the potential financial impact of lawsuits opposing YSL to shoe designer Christian Louboutin, and Gucci to Guess Inc., Palus said it was impossible to estimate the exact cost of defending PPR’s brands, but that it was “not significant.”

The meeting approved resolutions renewing the terms of three members of the board of directors: Luca Cordero di Montezemolo, Jean-Pierre Denis and Philippe Lagayette. It also approved the nomination of Jochen Zeitz, head of PPR’s Sport & Lifestyle division and chief sustainability officer, as a director for a four-year term.