* Says drop due to one-off charges related to Puma, La
* Says remains confident in level of recurring net income
(Adds details, background, analyst comment)
By Astrid Wendlandt
PARIS, Nov 13 French luxury and sports group
Kering issued a profit warning on Wednesday, blaming
one-off charges related to Puma's restructuring and the disposal
of loss-making mail order business La Redoute.
The Paris-based owner of fashion brand Gucci and sports
brand Puma said group consolidated net income for the
current year would be "down very significantly" versus 2012.
The company said in July that it was aiming to improve its
performance further over the full year.
Kering has come under pressure from the French government in
recent days to reconsider its plans to cut jobs before La
Redoute is sold.
More than 1,000 people, including employees, their families
and local politicians, demonstrated last week in the northern
French city of Lille to voice concern over the planned sale,
which labour unions say threatens around 700 jobs out of 2,500
"At this stage, and regardless of the solution, the board of
directors has acknowledged the financing needs related to
Kering's commitment as part of the disposal process," Kering
said in a statement, referring to La Redoute.
Kering has injected more than 400 million euros ($536
million) into La Redoute since 2008 and would be ready to inject
at least another 300 million in order to cover its losses for a
few years more and finance its restructuring, sources close to
the matter have said.
"It would appear that the fact that Kering is forced to
recapitalise before a deal is finalised is an indication that
the business is under very severe pressure," Exane BNP Paribas
luxury goods analyst Luca Solca said.
La Redoute is the last retail business Kering needs to sell
in order to complete its transformation from a retail company
into a luxury and sports brand group.
The process began in 2006 with the disposal of retail chain
Printemps when the group was still called PPR, an abbreviation
of Pinault Printemps La Redoute. Kering is controlled by the
Kering did not give details of the expected drop in net
income. It added, however, that it was confident in the
"solidity of its operating performance" for the year, as well as
in its level of recurring net income, which excludes one-time
Last month, Kering's star Gucci brand posted its weakest
sales growth in four years and said Puma's efforts to reposition
itself as a vibrant sports brand would take time.
On Friday, Puma, which is 84 percent owned by Kering, issued
a profit warning, partly due to exceptional costs incurred from
($1 = 0.7460 euros)
(Editing by James Regan)