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Sunday, February 17, 2013
Luxury Brands Lift PPR’s Sales and Profit for 2012
PPR, the Parisian holdings company, said net profit in 2012 increased by 28.2 percent to €1.27 billion ($1.7 billion). Revenue increased 20.8 percent to €9.73 billion ($13 billion).
The company, which has divided its high-end businesses into the categories of luxury and sport and lifestyle, said its luxury goods division reported a 27.6 percent increase in operating profit to €1.61 billion ($2.14 billion). This more than offset a 12.1 percent decline in operating profit in its sports and lifestyle division.
The company’s brands include Gucci, Bottega Veneta, Saint Laurent, Alexander McQueen, Balenciaga, Brioni, Christopher Kane, Stella McCartney, Sergio Rossi, Boucheron, Girard-Perregaux, JeanRichard, Qeelin and Puma.
Read PPR Shopping for Jewelry and Watch Brands “PPR's results for 2012 are excellent, thanks to the exceptional performances of all brands in our luxury division,” said François-Henri Pinault, PPR chairman and CEO. “Our strong performance also highlights the good geographic balance of our activities and the consistency of the Group's strategy.”
The company, which operates in more than 120 countries, said revenue generated outside the Eurozone rose 11.6 percent in 2012 based on comparable data and accounted for 78.6 percent of sales for the year, versus 77.9 percent in 2011. Sales contribution from France remained unchanged from 2011, representing 5.5 percent of total revenue on a comparable basis.
In 2012, PPR said it continued its expansion in rapid-growth markets where revenue advanced 13.7 percent on a comparable basis and accounted for 37.6 percent of sales, representing a 100 basis-point increase on 2011 on a comparable basis. Sales in the Asia-Pacific region (excluding Japan) accounted for 25 percent of the total sales of the Group's brands versus 24.5 percent in 2011 on a comparable basis.
The company also is in the process of strengthening its position in the luxury and sports and lifestyle categories while divesting its holdings in other areas. For example, in December 2012, it acquired of a majority stake in Chinese luxury jewelry brand, Qeelin, and last month announced it acquired a majority stake in the luxury designer brand, Christopher Kane. It is also announced in January that it has found a buyer for Redcats children and family divisions.
The company added that it’s in the process of speeding up and expanding the scope of its transformation of Puma “in order to increase efficiencies in terms of organization, processes and systems and to streamline its cost structure, notably in Europe.” In October, Jean-François Palus was appointed chairman of the Administrative Board of Puma SE, replacing Jochen Zeitz.
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I am a freelance writer and editor who covers the luxury jewelry and watch industry for several publications, including Forbes.com the Financial Times, Hong Kong-based JewelleryNetAsiaand the Italian jewelry magazine, VO+. In addition, I have my own blog covering the jewelry and watch industry, Jewelry News Network.