Wednesday, 25 November 2009

PPR Set For A Major Overhaul – 25/11/09

Under the direction of C.E.O Francois-Henri Pinault, PPR plans to sell retail businesses that generate 70 percent of group sales, in order to focus on clothing and accessories brands within its luxury Gucci Group and Puma, the sports wear company.

The first move in this overhaul is the planned flotation of CFAO, their African distribution business. Next, the business hopes to sell Fnac, a high street book and music retail chain, Conforama furniture stores and the Redcats catalogue business.

But according to a Financial Times article, Pinault “is not interested in slimming PPR down to a pure luxury player and is looking to replace the lower-margin retail businesses with mid-market brands.”

The Wall Street Journal also featured an interesting article on this subject. It revealed that PPR’s retail business has proven a drag on profitability. In the first half of the year, PPR said it made 1.7 to 3.3 cents on the dollar in its retail business, and 18.6 cents on the dollar in its luxury division.

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Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury,