Excellent performance of Luxury Goods at PPR

24 Jul '08

6 min read

In Q2 2008, PPR reported sales of €4,678 million, up 4.5% in reported terms and up 5.1% on a comparable basis in terms of Group scope and exchange rates, compared to Q2 2007. Sales in France accounted for less than 38% of total Group sales, compared to 40% in Q2 2007.

François-Henri Pinault, Chairman and CEO of PPR, noted:
“In a market environment in line with our expectations, PPR's activity in the second quarter improved at a steady pace, ahead of the Q1 progression.

The excellent performance of our Luxury Goods activities illustrates the strength of our brand portfolio, driven by the outstanding growth of the Gucci brand.

Our Consumer activities pursued their development in an environment currently under strain, and outperformed the market.

More than ever, our improved performance confirms the Group's resilience and growth potential. I remain confident in PPR's ability to achieve another year of growth and improve its financial performance in full year 2008.”

Fnac: solid growth sustained
Fnac's Q2 2008 sales were up 3.1% on a comparable basis compared to Q2 2007. In France, the brand reported a satisfactory performance, fueled by growth in technical products, which outperformed the market, and significant market share gains in all editorial product categories.

The momentum of on-line sales accelerated sharply. Fnac maintained its growth outside France with a strong increase in Q2 2008 sales, particularly in Italy, Switzerland and Brazil.

Eleven additional Fnac stores will be opened by the end of 2008, of which seven outside France and four “out-of-town” in France.

Redcats: resilience in a tough environment
In Q2 2008, sales of Redcats dropped by 3.9% on a comparable basis (up 0.5% in reported terms) compared to Q2 2007. The unfavorable economic environment, particularly in apparel, weighed heavily on Redcats, which nevertheless showed solid resilience thanks to intensified promotional activities.

The leading multi-channel brands reported contrasted performances. Excluding the significant impact from industrial action in Q2, growth in sales of La Redoute improved compared to the previous quarter, particularly outside of France.

The Sportsman's Guide sustained its strong growth while the performance of US Large Sizes improved. On-line activities continued to grow and represented 50% of Redcats home-shopping revenues in Q2 2008, compared to 41% in Q2 2007.

Conforama: solid performance of Furniture activities in a softer environment
Conforama Q2 2008 sales declined by 1.7% on a comparable basis compared to Q2 2007, as store renovations and conversions continued in France and Italy. The brand's French stores reported slightly lower sales from a high base of comparison in Q2 2007.

Sales of Furniture posted solid growth. Decorative Items reported a satisfactory performance while Home electronics posted contrasted performances.

In Italy, 10 out of 19 Emmezeta stores are already operated under the Conforama concept. In other countries, Conforama's international sales showed satisfactory resilience in a tougher environment in Q2 2008.

CFAO: another strong quarter:
In Q2 2008, CFAO benefited from a favorable economic environment and reported sales up 14.2% on a comparable basis, on top of high comparables.

This excellent performance was driven by the solid growth in Sub-Saharan Africa and Mediterranean countries and French overseas territories. The Automotive sector posted outstanding growth and the Pharmaceuticals sector maintained its solid performance.

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