PPR Focuses On Catalogue Business

Pinault-Printemps Redoute's Redcats, PPR's catalogue business, is breaking out of its image as a mail-order retailer and redefining itself as a fashion brand business, Dow Jones Newswires reported.

The division includes France's La Redoute catalogue and Chadwick's in the US and PPR is hoping to boost margins at what is the biggest contributor to operating profit in PPR outside of its luxury Gucci unit.

"It is revolutionary in our market to become focused on the brands," Redcats CEO Thierry Falque-Pierrotin told Dow Jones Newswires.In the first half of 2004, group operating profit surged 11 per cent, while Redcats' was flat. Its operating profit from January and June was EUR102m on EUR2.2bn in sales.

Falque-Pierrotin said the US business, which changed its name from Brylane to Redcats, could account for 40 per cent of total Redcats' sales, compared with 28 per cent this year. But analysts feel there are issues within the business that must be addressed first.

In charge of this problem is Eric Faintreny, who earlier headed Redcat's successful Scandinavian division but became CEO of the US operations in December. His mission includes breathing new life into staid brands giving the home decoration and gift catalogues a bigger role and prioritising Redcats USA's internet presence, Dow Jones said.

The advent of the internet has seen a number of US catalogue firms struggling as they are faced with heavyweight internet operations run by major bricks-and-mortar retailers. But profit potential is high with margins for online ops being higher than those telephone-based orders.

The US team is in charge of developing a new web platform for all of Redcats' international operations that will roll out in March.