PINAULT PRINTEMPS SETS STOCK SPLIT
Byline: Katherine Weisman
PARIS — Pinault Printemps Redoute made shareholders happy Friday, announcing a 5-for-1 stock split at the retail and distribution group’s annual meeting.
Serge Weinberg, chairman of PPR, stressed management’s desire to increase revenues outside of France, which last year accounted for 64.6 percent of total sales of $15.1 billion, translated from the French franc at current exchange.
The stock split, which will take place within the next 18 months, was approved at the extraordinary meeting that immediately followed. Weinberg said the split is being pursued for the usual reason of creating more liquidity.
“Our shares had just gotten too expensive,” Weinberg said after the meeting.
Today, PPR shares opened trading at about $839.49. This compares with the share price of $175.25 on the day of the company’s annual meeting in 1995, said Ambroise Roux, president of PPR’s supervisory board. PPR shares closed Friday at $884.74, up 5.3 percent.
PPR owns and operates the Printemps department store chain; the Redoute mail order group, which just acquired control of the American Brylane mail-order business; the Conforama home furnishings chain; the FNAC book and music chain, and Guilbert, a direct sales office equipment and supply company, along with distribution companies catering to the building industry like Rexel, a supplier of electrical equipment, and Pinault, which sells wood and other construction materials.
PPR also has the Finaref financial services division, which operates credit cards for the group’s stores and nonintegrated retailers, and an international trade operation called CFAO.
Discussing the firm’s overall business, Weinberg said, “Our strength is that we are not dependent on a specific sector or one kind of client. But our weakness is that our sales are still too heavily slanted toward France.”
But thanks to 15 acquisitions made last year, like that of Scandinavian mail-order leader, Ellos, and a handful more this year, including Brylane, non-French sales will climb to represent roughly 45 percent of this year’s revenues, Roux noted.
“Our original goal was to have 40 percent of sales coming from outside of France by the year 2000, and we will have already surpassed that this year,” Roux said.
Group executives declined to give estimates for 1998 sales or profits, but they said PPR has been relatively immune to the Asian crisis since it is hardly operating in the region. Only 2.1 percent of group sales come from countries outside Europe, the U.S. or Africa. The Cyrillus family apparel catalog does about $10.1 million in business in Japan, and that’s about all the Asian consumer business PPR does, Weinberg said.
Weinberg noted the group is focusing it’s non-French expansion on Europe and the U.S. In the U.S., in particular, PPR plans to expand its mail-order businesses, thanks to the Brylane purchase. The company is targeting Eastern Europe and is in discussions with potential local partners to open several of its retail stores in the region, possibly next year, Weinberg said, declining to provide further details.
Total net profits at PPR last year were $726.5 million.