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NEW YORK — PPR’s François-Henri Pinault opened up Wednesday about his newest hire Alexander Wang, as well as the looming fiscal cliff, his own’s family’s succession plan, the importance of the American market and e-commerce’s influence on boutique sales.
Considering PPR’s nearly $15.7 billion in revenue, 47,000 employees worldwide and distribution in 120 countries, the group’s outlook is understandably an international one. Even still, in a question-and-answer session at the French Consulate with CBS’ Rebecca Jarvis, Pinault seemed particularly pleased about adding Wang to his roster. After a 15-year stretch with Balenciaga creative director Nicolas Ghesquière, Pinault spoke quite a bit about why Wang was chosen. While PPR never entertained acquiring the 28-year-old designer’s own business, the conglomerate does have great expectations for what Wang will do with the Balenciaga label.
Confident as he is about the long-term potential of the American market, Pinault also spoke promisingly about emerging ones like Brazil and China, where brand-loving younger consumers are fueling growth in the luxury sector.
Pinault had more news to share later in the day, when PPR revealed that Redcats inked a $525 million deal to sell OneStopPlus Group, its plus-size business in the U. S., to Charlesbank Capital Partners and Webster Capital.
Here, some of the highlights from Pinault’s Q&A.
CHOOSING ALEXANDER WANG
“We want to continue to build. We decided that with Nicolas [Ghesquière] it was time to separate our path. After 15 years, it was quite a noble decision. We were looking at who could take on the helm for the brand’s creative. The way we do it we really spent time understanding who is, not what is, the brand — the human being. And we wanted to really continue what has been built by Nicolas. Alexander Wang is young and he has a very universal culture. He is American with Chinese roots. His family is based in Shanghai. He has a very strong talent not only when it comes to accessible product, but his talent could also be adapted for couture at Balenciaga. It will be a big challenge for him. I like that he’s young and based in New York, so we will have more exposure of the brand worldwide. Alexander has this wonderful contemporary brand under his own name and this has nothing to do with Balenciaga. We will not change anything in the positioning [of the Balenciaga brand.] We have spent a lot of time determining where the brand is and where we want to stay in terms of being very modern and avant-garde, but still being influenced by the street. Nicolas was one of the best at this.”
RELATED STORY: Alexander Wang Gets to Work at Balenciaga >>
HOW, IF AT ALL, WANG’S FAMILY ROOTS CAME INTO PLAY
“No, it is a mixture of value that Alexander will bring. It was not a criteria for recruitment at all. It was really [a matter of] let’s find the right talent, the right skills, the right profile for the reality of the brand. The brand has been built over the last 15 years with Nicolas. We don’t intend to change. It’s not a rupture. We plan to continue to build on what has been built by Nicolas. We needed someone who was capable of coping with that. So that is what is at stake.”
DEALING WITH NAYSAYERS
“I heard that so much when Sarah Burton was appointed [creative director at Alexander McQueen] or Frida [Giannini] at Gucci. What I read is that the only thing people can look at is what has been done in the Alexander Wang brand. It has nothing do with what we are going to do with Balenciaga. You cannot judge from that. It’s a new challenge. It’s a new adventure for him. He has a great talent. I am pretty sure that we will demonstrate it. We did that with Nicolas when we started in 1997.”
FIRST THINGS FIRST
“This is the first time that such a talent started his career with his own brand and then moved to an existing one in a new segment. This has never been done before. Usually talent starts with a brand then over time they become a little bit frustrated with the brand they are working with because it has constraints and they cannot do whatever they want. Then they feel a very strong attraction to building their own brand. Alexander has already expressed himself with the total feeling of building his own brand. Now he wants this new challenge for himself.”
THE FISCAL CLIFF
“In countries in Western Europe, it is more than a cliff — it’s a mountain. It’s a reality that we need to address. It would be a big mistake to postpone a resolution. I am absolutely convinced that if America is capable of escaping the fiscal cliff then maybe Europe can, too.”
“The idea with Puma is to define over the next 10 to 15 years ways to extend products that will not be competing with Puma. We have identified two key segments where we think there is potential worldwide — action sports, this was the reason for acquiring Volcom [last year], and the other one is outdoor. We want to grow Volcom internationally. It is still a 75 percent American brand. Puma will do some outdoor things but it will never be the key category. Outdoor is a very big market segment and it combines technical and lifestyle.”
WHY THE PINAULT SUCCESSION WORKED
“One reason — my father [François]. He is amazing. He was 65 when he decided to give me the reins of the company, and not because he was feeling tired or whatever. He said, ‘You’re 40 years old. It’s time. It’s your time. Don’t pay any attention to me. I will find my way. If I were you at 40 years old, I would like to have the main job.’ And he gave me the keys, literally the keys to his office, and it was done.”
“If you look at [online] sales, it’s not very big, maybe 2 or 3 percent. But one customer in five on average will go online before going into stores. So the influence of the online channel on the offline channel is great. You can be a small brand or a big brand like Gucci, but you cannot offer your customers an experience in your stores that is completely different from what you offer them online. This is not acceptable. The next step will be to transform the e-commerce experience of our brands into the luxury experiences as we do in our stores.”
THE U.S. VIEW
“I am very confident in America. First of all, [there is the] population of this country and the diversity of the communities. The youth of America gives such strength for the future. Diversity is probably the biggest asset of the country. The aspiration for a better life [here] is very strong and they are accustomed to expressing themselves. There is also another dimension which is tourism. Thirty-five to 40 percent of the luxury industry relies on tourism. This country is one of the greatest destinations in the world. America has a very strong number of tourists from Latin America and Asia. Accessories are very important, for sure. Sometimes they [tourists] are a little disappointed. They think they will find better and bigger stores in America. But in reality, the most recent stores have opened in China.”