Francois-Henri Pinault to sell PPR’s retail divisions
Francois-Henri Pinault, CEO of PPR SA, plans to sell the company's European retail divisions, including electronics retailer Fnac and the Conforama furniture stores, in order to focus on the company's global brands, such as Yves Saint Laurent and Puma, the Wall Street Journal reported.
The report noted that the move mirrors a decision made by Pinault's father, Francois Pinault, who moved his family's lumber and distribution business into luxury goods when he bought Italian fashion house Gucci NV a decade ago.
According to the Journal article, PPR could obtain about $6 billion from the sale of its retail businesses, and would use those funds to acquire more apparel and accessories brands, creating a new mass-market division.
For PPR, which is 41% owned by the Pinault family, exiting retail means giving up businesses that made up more than half of the company's 20 billion euros in sales last year and that are dominant chains in their home market.... PPR is now trading in its French retail operations for a more global identity.
While PPR's retail business has been steadier than its more volatile luxury-goods business, the retail division has been a drag on profitability, the Journal reported. Exiting from retail when the luxury goods sector is suffering is risky, the report noted.
(Source: Wall Street Journal, Nov. 24, 2009.)
Posted Tuesday, November 24, 2009 • Permalink