PRINTEMPS PRESSING AHEAD WITH OPENINGS, NEW EFFORTS
Byline: Katherine Weisman
PARIS — Undaunted by the continued sluggish domestic economy, the Pinault Printemps Redoute retail and distribution group is plowing ahead this year with store openings, new programs and catalog launches.
During a meeting last week for financial analysts, PPR chairman Serge Weinberg reported the following initiatives.
The Printemps department store group will launch a 36-page women’s catalog this fall.
The Printemps Paris flagship will devote its renovated main and first floors solely to accessories starting in September. The main floor has featured accessories; the first floor has had part of the store’s women’s apparel selections, now being incorporated into the three renovated fashion floors.
The new Orcanta lingerie multibrand store concept will be rolled out to some 27 stores by the end of the year. Three pilot stores were opened last fall.
The Redoute catalog group will open a pilot store in Lille, France, for its Somewhere brand of casual sportswear,which until now has been sold now via the Redoute catalog.
The Prisunic variety store chain will redo its children’s departments, after having revamped its women’s fashion and cosmetic sectors.
Weinberg said the new concepts and developments will contribute sales of approximately $266 million (1.5 billion francs) at current exchange to the group during this fiscal year.
Weinberg announced that PPR group profits in 1996 increased by some 36.2 percent to $365.4 million (2.06 billion francs).
Operating profits posted an increase of 18.4 percent to $627.9 million (3.54 billion francs) last year.
The gain came despite increased special charges last year of $41.9 million (239 million francs), compared with 171 million francs reported for 1995.
Last year’s charges included $32.3 million (182 million francs) for restructuring costs, the bulk of which were attributed to the group’s consumer retailing activities, Weinberg said.
Consolidated sales, as previously announced, rose 3.6 percent to $14.3 billion (80.39 billion francs).
Excluding operations that were sold off in 1995 and 1996, sales would have risen 8.3 percent, the company asserted.
Consumer retailing accounted for 57.1 percent of total sales last year.
Stores in the group include the Printemps department store chain, the Prisunic variety store chain, the Redoute catalog group, the FNAC audiovisual and book retailer and the Conforama home furnishings chain.
Industrial distribution of building and electric equipment made up 35.1 percent of sales, while foreign trading activities accounted for the remainder.
The Printemps department store chain saw a sales decline last year of 1.5 percent to $828.4 million (4.67 billion francs).
This decline was attributed primarily to the $40 million ongoing renovation at the Paris flagship, which has closed off hundreds of square feet of its selling space.
“We are not pleased with this result,” Weinberg said. “The sales loss was more than we expected, especially since we had prepared our estimates based on 1995, a tough year, when store sales were hurt by bomb threats and yearend strikes.”
Weinberg noted, however, that on a pro forma basis, sales at the flagship would have risen 4 percent.
Operating profits at Printemps were $1.6 million (9 million francs) last year, compared with an operating loss of 34 million francs reported for 1995.
Following their renovations, which were completed last fall, two of Printemps’s three fashion floors are posting sales gains of approximately 50 percent and 35 percent, respectively, on a month-by-month comparison with 1995 and 1996, according to Printemps France chairman Philippe Vindry.
Following Wednesday’s meeting, Vindry told WWD that while devoting two entire floors to accessories might be a big bet, he’s convinced it’s the right step.
The existing main floor of Printemps’s fashion building is about 44,400 square feet, which, Vindry pointed out, is significantly smaller than the main floors of American department store giants like Macy’s.
Printemps’s beauty area, housed in the adjacent home decoration building, measures some 17,700 square feet.
Vindry noted that the two spaces combined are smaller than the main floor of competitor Galeries Lafayette’s, which measures approximately 77,700 square feet and houses both the beauty and accessories areas.
The fashion store’s second floor will provide an additional 22,200 square feet for accessories, Vindry said.
Vindry said the second floor will showcase medium to high-end luxury brands as well as women’s shoes.
The main level will be devoted to “more basic accessories” like scarves and fashion jewelry.
Printemps’s initiative to launch a women’s catalog is based in part on the success American department stores have had with mail order, Vindry noted.
“Some stores in the U.S. realize 10 percent of sales from their catalogs,” Vindry said. “That is a sum that cannot be ignored.” The women’s catalog will feature mainly Printemps’s private label and a smattering of national brands. Printemps’s Brumell men’s division tested a men’s catalog last fall, and is continuing the initiative.
At Redoute, operating profits last year rose 16 percent to $89.6 million (505 million francs) on sales of approximately $2.8 billion (16 billion francs), increased almost 8 percent.
The company is expanding its own catalog operations to the United Kingdom and Germany.
Catalogs in the Redoute group, including the French preppy Cyrillus catalog and the Vert Baudet children’s catalog, have opened stores and are planning more, Weinberg noted. The new Aqualiance beauty and cosmetics catalog launched last fall is posting encouraging results.
A long-term goal is to expand the group’s sales internationally.
By 2000, Weinberg wants 40 percent of group sales to be generated outside France, compared with the current share of 30 percent.
To accomplish this, the company recently created PPR Asia to pursue expansion in that region.
On March 15, PPR Asia reached a cooperation agreement with Thailand’s Central Retail Corp., a major distribution group operating in Thailand and Southeast Asia.
The first step of this partnership is to study opening Conforama home furnishings stores in Thailand.
PPR already has a small Asian presence.
Several Printemps stores have opened in Southeast Asia over the past several years in partnership with local retailers or other business groups.