PARIS — PPR, the French retailer that owns Gucci Group, is bullish for 2006, thanks to a strong outlook for luxury.
That was the message delivered by François-Henri Pinault, the group’s chairman and chief executive, as he addressed the annual shareholders’ meeting here Tuesday.
“We are confident for 2006,” said an upbeat Pinault. “Luxury remains strong, and we are in a good position with all of our brands.”
Pinault added that the group’s retail operations — from the Printemps department stores to the FNAC music and bookseller — also should benefit from better consumer spending in Europe and France.
During the meeting, Pinault ran through the highlights of last year, trumpeted the performance of the luxury division — especially double-digit growth at the Gucci and Bottega Veneta brands — and said the remainder of the group is in fine fettle for the future.
Luxury drove PPR last year, propelling net income up 11.2 percent. The momentum carried over into the first quarter of this year, as Gucci Group sales barreled ahead 19 percent. Overall, sales gained 7.9 percent in the first three months of the year.
Pinault did not provide any guidance on April or May, but said he was “very confident” for the remainder of the year, especially for the Gucci brand, which marks its 85th anniversary in 2006. Pinault added the brand will be bolstered by a raft of limited-edition products created to celebrate the event.
He said Gucci will inaugurate a new retail concept in Tokyo this fall that will be rolled out to the rest of the Gucci stores over time.
Bottega Veneta, which moved out of the red last year for the first time, also was one of Pinault’s bragging points. He said the brand (its first-quarter sales vaulted 77 percent) will be energized further by a handful of new boutiques this year, including locations in Hawaii, Hong Kong and Tokyo.
On Monday, the brand opened its first shop in Cannes — just in time for the International Film Festival.
Though Pinault did not offer a break-even date for the money-losing Yves Saint Laurent fashion business, he said new management has made strides forward.
Faced with criticism about YSL during the question-and-answer session, Pinault underlined that it was only since 2004 that PPR had total control of the brand, after the departure of Tom Ford and Domenico De Sole.
“Let’s just say we lost three years,” said Pinault, adding that the creative direction of the brand under Ford wasn’t right. “Now we’ve put it back on track from a creativity and product standpoint. In one year, it has fundamentally changed.”
As for the so-called “other brands” — Balenciaga, Stella McCartney, Alexander McQueen, Sergio Rossi, Boucheron and Bedat & Co. — Pinault said 2006 “should confirm the success of last year.”
He particularly praised Balenciaga, which moved into the black last year for the first time, and proudly told shareholders that Time magazine had recently elected the house’s designer, Nicolas Ghesquière, as one of the 100 most influential people in the world.
The Boucheron jewelry business was saluted for being ahead of schedule on its plan to break even in 2007.
Gucci Group will convene a meeting next Tuesday in Amsterdam for shareholders who didn’t cash out when PPR made a full tender offer for the firm. Though PPR owns 99.48 percent of Gucci, it remains obligated to hold a meeting for the few outstanding shareholders. A spokesman called it a non-event and said he expected very light attendance.