The luxury brands and fashion houses are coming out with the first quarter results with healthy bottom-line. PPR, the French luxury retailer recently came out with their first quarter results that were better than the expectations of the market. Luxury goods that accounted for 30% of their total revenue grew 26% year on year. The most heartening part was that their luxury sales in the US grew by as much as 40%. There was growth in every region of the world market except Japan where the rising trend was cut short by the March 11 earth quake.
PPR owns fashion brands like Balenciaga and Gucci, sports brand Puma and retailer Fnac. They have been trying to reorganize their operations to optimize the effectiveness of their portfolio. As a part of this process they sold off Conforama and is looking for buyers for home shopping unit Redcats, whose sales rose just 1.1 percent in the quarter. Fnac might also be put on the bloc as it is unable to sustain its sales. The company spokesperson was not willing to comment on the sales plan but was happy to confirm that the group has registered a growth for the third consecutive quarter and the contribution of online sales in the final figures was significant.
Francois-Henri Pinault, the Chief Executive of the group issued a statement announcing a total sale of $5.43 billion for the first quarter. The group managed to exceed the market analysts’ expectations. They believe that their pricing and restocking strategies in the US helped the company a great deal. The growth in luxury is expected to stabilize but will remain strong through the year. If looked at separately Gucci sales rose 24% in the first quarter. Their leather goods did particularly well. Puma, which has become part of the group recently and is 73% owned by PPR has set a target of 3 billion euros for itself. Their individual sales rose 13% to reach a figure of 773 million euros and they seem to be on track to reach their target.
Via: reuters
