PPR to buy former James Bond tailor Brioni

PARIS Tue Nov 8, 2011 11:17am EST

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PARIS (Reuters) - Luxury and retail group PPR SA (PRTP.PA) said it has agreed terms to acquire the Italian suitmaker that once clothed James Bond, beefing up its presence in high-end men's fashion.

PPR, owner of Gucci and Yves Saint Laurent, did not disclose the price it paid for family-owned Brioni, whose suits have been featured in many Bond films. But analysts estimate Brioni's enterprise value at 250 million euros to 300 million euros, including 100 million euros in debt.

It is the latest in a series of acquisitions by the luxury retailer which earlier this year bought U.S. sports clothing brand Volcom and Swiss watch maker Sowind Group.

At the same time, PPR has been trying to unload some of its less profitable units like catalog retailer Redcats and record and consumer electronics chain Fnac.

PPR Chief Executive Francois-Henri Pinault, who revealed in September that the company was in talks with Brioni, said the company had paid "significantly less" than the 350 million-euro ($481 million) figure cited earlier this year.

Pinault also voiced hope that a sale of Redcats -- postponed in September after indications that bids would come in well below the 1.5 billion-euro reserve price -- could still happen, saying there were 18 interested candidates.

"The interest hasn't disappeared and interest has been expressed since then," he said, adding that several of the potential buyers had their own financing.

Frozen financing markets were one of the reasons that the Redcats sale, which had attracted interest from numerous private equity firms including Advent, Apollo, Bain, Carlyle, Cinven and a team of TPG and PAI, was postponed.

"Even if small, this deal confirms the company's willingness to increase exposure to the fast growing soft line luxury market," said a Paris-based trader. "Also, the company already proved its strong track record in transforming small luxury brands into great success stories."

Helped by Pinault's comments on Redcats, the trader said, PPR shares were up 4.4 percent by 1150 GMT, outperforming France's benchmark CAC 40 .FCHI index, up 2 percent.

PPR said an agreement had been reached with Brioni's shareholders to buy 100 percent of the share capital. The deal was expected to be finalized by early next year and needed to be approved by antitrust authorities.

PPR said it plans to boost growth at Brioni, which has 1,800 employees at eight different production sites, through expansion into emerging markets and a wider product range.

Pinault said PPR is particularly interested in expanding Brioni's presence in mainland China, where it is currently only present via franchise shops.

Brioni, founded in 1945, also makes ties, shirts and leather goods. It had revenue last year of 170 million euros and has its main workshops in the Abruzzo region of Italy as well as a network of 74 stores worldwide. ($1 = 0.727 Euros)

(Additional reporting by Leila Abboud, Elena Berton and Blaise Robinson; Writing by Christian Plumb; Editing by Elaine Hardcastle)

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