Sales decline at luxury group PPR

For the first half year to June 2009, French luxury goods conglomerate PPR generated revenues of €9,235 million, down 3.6%. In the second quarter revenues were down 4.7% in reported terms and 6.9%. PPR's portfolio of brands include Yves Saint Laurent, Gucci Group, Puma and Fnac. The company stated the contribution of activities outside of France to total revenues continued to grow, accounting for 63.8% of the total in the first half of 2009, as compared to 62.8% in the comparable period of 2008. Gucci Group posted a 15% increase in revenues in emerging markets, which accounted for 31% of its sales, up from 26% in the first half of 2008.

In the first six months of 2009, online sales of the PPR Group rose by 5.7% in reported terms and 3.3% on a comparable basis. In the first half, e-commerce accounted for 10.5% of total PPR revenues, up from 9.5% in the comparable period of 2008. Particularly noteworthy this semester was the 7.5% increase in revenues from fnac.com, which further developed its marketing presence with the launch of a marketplace for outside sellers.

Gross profit in the first half of 2009 was €4,094 million, yielding a gross margin of 44.3% of total revenues, up 0.1 percentage point from the comparable 2008 period. In particular, gross margin held up well at Fnac, Conforama, Redcats and Bottega Veneta in the period.

Group recurring operating income totaled €707 million, a decline of 4.8% compared to the first half of 2008. Gucci Group achieved a steady increase in recurring operating income to €305 million, with a solid performance at Gucci.

François-Henri Pinault, Chairman and CEO, noted: “PPR has delivered solid results in the first half of 2009 despite the further worsening of its markets. Sustained hard work by all our teams, the early benefits of which we are already seeing, enable us to preserve our profitability. Alongside these short-term actions, we have launched initiatives aimed at reconfiguring our organizations and energizing our sales efforts over time – these should begin to bear fruit in the second half of this year and continue into 2010. We are satisfied with our performance to date, as it underlines the appropriateness and effectiveness of PPR’s strategic direction. We are doing everything we can to ensure that the Group weathers the current developments and seizes opportunities as soon as the crisis subsides. I remain confident in our capacity to further strengthen our competitive advantages and our positions in each of our activities.”

Image: Gucci Group Logo