PPR moves to complete Gucci sale
$2.8bn offer for luxury brand business
French retail group Pinault-Printemps Redoute is set to spend $2.8 by buying the one-third of luxury retailer Gucci it does not already own.
PPR will be hoping for an upturn in the fortunes of the Gucci business, which also includes fashion brands Yves Saint Laurent, Alexander McQueen, Stella McCartney and Bottega Veneta. In the year to January 31, group profits fell 23.2 per cent to €174.2m on sales up by 1.7 per cent.
Gucci chief executive Domenico De Sole said that a strong recovery for sales of the Gucci brand, as well as an overall upturn in group trading, were not enough to offset the impact of the Iraq war and the Sars virus on the luxury retail market.
De Sole also conceded that there are continuing problems at Yves Saint Laurent, which has been making losses and has been hit by delivery delays with some ranges of its luxury handbags.
The fourth quarter saw total sales growth of 3.8 per cent to €741.m. Profits were up 29.2 per cent to €148.9m as the group addressed costs by closing three underperforming stores and cutting back on store investment.
De Sole, who along with designer Tom Ford is quitting Gucci as PPR takes over, said the group was confident about an upturn in the luxury goods sector and has a ‘great year’ ahead.
PPR, which is paying $85.52 a share for the remaining stake in Gucci, has yet to name De Sole’s successor. PPR boss Francois-Henri Pinault has indicated that the choice is down to two candidates, with an announcement due this month.
PPR built up a controlling stake in Gucci in 2001 when the group faced a hostile bid by rival LVMH.
