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.