French retailer PPR Sees Q3 Revenues Fall

French retailer Pinault-Printemps-Redoute says today that revenue during the third quarter fell 16 percent to €5.37 billion from €6.42 billion last year. The company says a stronger euro and sluggish summer markets were at the heart of the fall.

PPR, One of Europe’s biggest retailers with a two-third stake in luxury goods maker Gucci, plans to offer to buy minority shareholders in Gucci. To achieve this PPR is in the middle of a complete over haul process.

It is riding itself of lower margin businesses, including its 72 percent stake in electrical products retailer Rexel, which only yesterday reported a 9.4 percent drop in quarterly sales.

After the company finishes the shift to higher earnings operations, it expects things to pick up. One way of proving it right now, the company highlights a 0.8 percent rise in revenues in its core operations – those that will be part of the so-called “New PPR” - to €3.75 billion in the third quarter.

Luxury goods did well despite adverse environment, including a seething summer.

The Gucci division recorded a 1.4 percent drop in reported sales. On a constant exchange rate basis, directly operated store sales rose by 10.3 percent in Japan, 1.6 percent in the rest of Asia (South Korea up by 47.5 percent), 35.3 percent in the People's Republic of China and 6.2 percent in the United States.

Yves Saint Laurent sales increased by 14.6 percent on a constant exchange rate basis, with growth of 22.8 percent for its directly operated stores. Sales of leather goods soared, rising 91.4 percent on a constant exchange rate basis. In the quarter, Yves Saint Laurent opened major stores on Rodeo Drive in Beverly Hills, on 57th Street, off 5th Avenue in New York and a store specialized in accessories on Via Condotti in Rome.

Yves Saint Laurent Beaute recorded sales growth of 9.5 percent on a constant exchange rate basis. Yves Saint Laurent Beaute launched the fragrances Kingdom for Alexander McQueen and Essenza di Zegna for Zegna in the first half of 2003.

Reported sales of the other brands were up 16.1 percent in the quarter, mainly driven by Bottega Veneta's sustained growth, up 33.7 percent in reported terms and 72 percent on a constant exchange rate basis for its directly operated business. Alexander McQueen and Stella McCartney more than doubled their sales in the third quarter.