PPR Report Growth in Luxury

France’s PPR last week said buoyant luxury sales and asset disposals drove full-year net income up 45.9 percent, but business has cooled recently at its retail operations in France. Nonetheless, the luxury and retail conglomerate voiced optimism for the rest of the year, reporting a 15.1 percent increase in sales at Gucci Group in January and February.

“It’s very clear that there will be more growth in luxury this year,” said François-Henri Pinault, who on Monday will take over as chairman from Serge Weinberg. “Luxury is strong in the United States and Asia, even if it’s weaker in Europe.” PPR’s net income last year reached 940.6 million euros, or $1.17 billion at average exchange, up from 644.6 million euros, or $801.79 million, last year.

“Last year marked the successful completion of the group’s transformation as we took full operating control of Gucci Group and sold our remaining noncore businesses,” said Weinberg. “The strong sales momentum and sharply improved profitability achieved in 2004 clearly show that PPR is entering a new chapter in its history under most auspicious terms,” he added.

In a brief presentation, Pinault saluted Weinberg’s achievements at the helm of PPR over the last 10 years. “We will follow the strategy we have put in place,” he said. Pinault touted luxury as a key avenue of growth in years to come. “We must grow the brands to improve sales and profits,” he said. “We have the cash flow needed to assure this growth.”

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