* Q1 consolidated revenue up 15.4 percent
* Q1 Gucci unit sales up 12 percent
* Sees positive 2012
(Adds details on units, context on luxury market)
By Nina Sovich
PARIS, April 25 French luxury and retail group
PPR posted a rise in first-quarter revenue on Wednesday, helped
by buoyant luxury sales, which offset sluggish growth at its
retail outlet Fnac and sports and lifestyle company Puma.
The luxury division, which accounts for nearly half the
company's sales and includes Gucci and Yves Saint Laurent, grew
17.8 percent stripping out acquisitions and currency
fluctuations, due to strong growth in mainland China and tourist
purchases in its U.S. and European stores.
However, French retailer Fnac, which sells movies, books and
CDs, contracted slightly and Germany's Puma, of which
PPR owns 80 percent, came in below analyst targets, helping drag
down sales in the entire group.
PPR's group managing director Jean-François Palus
acknowledged in a conference call with journalists that Puma's
performance had been "disappointing" but he said that PPR was
putting focus on design and new management to turn around the
He also vigorously shot down rumors that PPR was looking to
sell Puma to a private equity investor.
"We are not used to commenting on market rumours ... but
this rumor that we would sell Puma for 8 billion euros is
LUXURY IS UP
PPR is in the midst of a transformation from a luxury and
retail company into one anchored by a sports and lifestyle
division that is meant to provide stability in times of economic
To that end, PPR is in the midst of boosting its luxury
division -- recently purchasing Italian menswear company Brioni
-- and shedding retail operations such as online and catalogue
But the poor economy in Europe is making a sale of Redcats
difficult. Last summer PPR pulled an auction because bidders
were not meeting a reported threshold of 1.5 billion euros. PPR
said Wednesday it continued to talk to potential buyers.
Fnac, where sales contracted 0.8 percent for the quarter,
has long been a headache for PPR as consumers turn to the
Internet to buy both music and books and unions resist a private
equity buyer. No immediate sale is on the horizon.
In addition, competition for luxury goods companies has been
intense. Last year PPR rival LVMH sealed a deal to buy Italian
jeweler Bulgari for twenty eight times earnings before interest
taxes, depreciation and amortization, a price many analysts
LVMH, which is weighed almost entirely toward luxury,
reported last week that overall sales on a like for like basis
rose 14 percent for the quarter.
The long process of shedding the retail operations has also
cast a question mark over PPR's strategy to focus on sports and
lifestyle when luxury goods are booming.
This growth was due to strength in emerging markets,
especially in greater China where sales at Gucci for the quarter
rose 19 percent on mainland China on a constant basis.
Slower growth or outright losses in Italy, South Korea and
Taiwan helped pull down overall sales for Gucci to 12 percent on
a comparable basis.
(Reporting by Nina Sovich; Editing by Lionel Laurent,
Hans-Juergen Peters and Bernard Orr)