FOREIGN EXPANSION, NEW IDEAS IGNITE GROWTH AT PRINTEMPS
Byline: Katherine Weisman
PARIS — Growth at Pinault Printemps Redoute, the diversified French retail and distribution conglomerate, is being fueled by both expansion in foreign markets and development of new concepts in France.
These strategies were discussed at a recent press conference here, where first-half profits were revealed, showing income for the six months up 26.1 percent from a year ago to reach $159.5 million (943 million francs). Sales in the half gained 8.3 percent to $6.9 billion (40.9 billion francs).
If the French government had not imposed steeper corporate taxes, net profits for the diversified retail and distribution conglomerate would have risen 34.3 percent, the company said.
PPR chairman Serge Weinberg said sales for the group’s retail division, which includes the Printemps department store chain and the Redoute catalog group, rose 4.4 percent for the period to $3.7 billion (22.1 billion francs), despite the continued sluggish French economy and no signs of a recovery.
Within this division, overall sales for the Printemps chain rose 9.8 percent to $367.1 million (2.17 billion francs) and for La Redoute rose 37.2 percent to $1.4 billion (8.27 billion francs).
A strong performance in early fall selling at the Printemps Paris flagship reflected the dramatic $33 million renovation of the store’s fashion and accessories floors, Per Kauffman, president of Printemps, said. The store is throwing a gala on Oct. 13, the first day of the Paris ready-to-wear collections, to show off its new spaces and the sparkling first two floors devoted entirely to accessories.
The other retailers in this group include Prisunic, a variety store chain; FNAC, a book, music and multimedia chain, and the Conforama furniture store. The sales of these retailers combined were about $1.99 billion (11.76 billion francs).
Much of PPR’s growth is coming from foreign business. Redoute operates various catalogs in the U.K. and Germany, and the group’s acquisition earlier this year of Sweden’s Ellos mail-order operations makes PPR the dominant player in that mail-order market. But first-half growth also came from expansion of new retail concepts in PPR’s domestic markets in France. For example, the Orcanta chain of freestanding multibrand lingerie shops was launched with the opening of three stores last fall. By the end of this year, there should be 30 Orcanta stores throughout France.
Also, some of Redoute’s catalog businesses, like the Vertbaudet children’s wear book, are opening freestanding stores.
Not all PPR’s projects have been fruitful. The skin care catalog, Aqualiance, launched at the end of last year, flopped. Weinberg explained that the strategy of the book has to be rethought, and added it had problems because Aqualiance is a new brand with no big name behind it; in skin care, women “need more reassurance,” he said. He also noted the product range was not well adapted for the market.
Looking ahead, Weinberg said PPR’s growth in France would be generated by new or expanded retail concepts. Plans are in the works to launch a sporting goods chain early next year.
Growth abroad will come from Asia, where PPR will open buying offices in Hong Kong and Shanghai at the beginning of next year, and Latin America, where PPR will set up a subsidiary to expand its retail activities and distribution of building materials.