– Solid performance in Retail: +3.6%
– Strong momentum in Luxury Goods: +14.4%
François-Henri Pinault, Chairman of the PPR Management Board, stated: “The first-quarter 2005 sales for the PPR Group in its new configuration underscore the good performance of Retail activities in a sluggish marketplace and continuing strong momentum in Luxury Goods.
These figures confirm our organic growth potential. The quality of our Retail companies and appeal of our Luxury brands should enable PPR to continue to grow faster than its markets throughout the year.”
Group sales amounted to EUR 4,107.5 million in the first quarter of 2005.
On a comparable basis in terms of Group structure, exchange rates and number of selling days, revenues grew 5.3% in the first quarter of 2005. Taking into account particularly negative calendar effects during the quarter, the increase amounted to 3.1% on a comparable scope and exchange-rate basis.
Revenues grew by 2.2% compared with the first quarter of 2004, after adjustment for the impact of the change in the closing date of Gucci Group's financial year and the transition to IFRS.
Luxury Goods: +14.4%
– Luxury Goods sales rose sharply over the quarter, thanks notably to good momentum in the Gucci division (which accounts for more than 60% of total Luxury Goods sales), continued fast growth at Bottega Veneta, and very good performances by such brands as Balenciaga and Boucheron.
– Leather goods were the strongest product category during the first quarter, with sales rising 35.1%. Other good performers include men's footwear, which rose by 15.8%, and makeup, which rose by 15.0%.
– Luxury Goods sales continued to grow on every continent: Europe was up 10.2%, North America 14.2% and Asia-Pacific 28.3%. Japan confirmed its recovery with an increase of 14.0%.
– Sales in directly operated stores increased by 24.3% while wholesale rose a more modest 4.4%.
Revenues grew by 19.3% over the first quarter of last year on a comparable basis, buoyed by double-digit growth on all continents. Sales in directly operated stores rose 24.2%. The brand continued to reinforce its network during the quarter, opening two new stores in Osaka and Kuala Lumpur. Wholesale sales rose by 9.8%. The brand's growth was driven by leather goods and men's and women's footwear, which rose by more than 25% in the quarter. These products account for more than 70% of Gucci brand sales.
– Bottega Veneta
Bottega Veneta continued its remarkable development, posting 54.2% growth in the first quarter on a comparable basis. The brand was lifted by its growing profile among consumers and expansion of its directly-operated store network
Sales in directly operated stores surged 61.7%.
Leather goods continued to drive the brand's growth, rising by 59.7%.
Bottega Veneta achieved spectacular growth in every region: North America +40.7%, Europe +49.7%, Japan +60.6%, and Asia-Pacific +67.7%.
– Yves Saint Laurent
The brand's sales grew by 1.5% in the quarter.
Sales in directly operated stores increased by 5.7% over the quarter. The gain reflects a 9.1% increase in leather goods and, notably, 11.5% growth in women's ready-to-wear, due to favorable reaction to Stefano Pilati's first collection. Wholesale, which account for 27.5% of the brand's revenues, declined by 11.9%, partly due to delivery issues.
The brand grew by 3.9% in Japan and 6.0% in Asia-Pacific. Sales were stable in North America and down a slight 2.4% in Europe.
Stefano Pilati's début collection marked an important first step in repositioning the brand. Under the guidance of Valérie Hermann, the Yves Saint Laurent management team is now concentrating on improving merchandising, logistics and distribution.
– YSL Beauté
Sales at YSL Beauté (up 0.9% in the quarter) were fuelled by 5.5% growth in Yves Saint Laurent-brand products. These products represent 71.6% of YSL Beauté's sales.
In a difficult market and compared with a strong first quarter 2004, YSL Beauté's fragrance business declined by 5.8% while makeup was up by 15.0%.
In women's fragrances under the Yves Saint Laurent brand, Cinema, which was launched in October 2004, confirmed its initial success and is catching up with brand leader Opium.
– Other brands
The 11.0% sales rise principally reflects the recovery of Boucheron and the good performance of the designer brands, especially Balenciaga.
– Retail: +3.6%
In France, the Group recorded growth of 3.5%, primarily driven by Fnac and Conforama in difficult market conditions. These conditions mainly resulted from the end of measures to stimulate consumer spending and from poor weather conditions, affecting every product category and apparel in particular.
Outside of France, revenues grew 3.6%, notably reflecting robust international growth at Fnac, the continuing development of CFAO, and the confirmation of Redcats' rebound in the United States.
The Retail companies posted significant gains in the area of e-commerce, with sales rising 34.1% to EUR 285.6 million in the first quarter of 2005. E-commerce accounted for 8.4% of Retail activity in the first quarter of 2005, compared to 6.3% in the first quarter of 2004.
In France, the company recorded growth of 5.2%, driven by a rise in sales of electrical and home appliances. This significantly offset a slowdown in furniture sales in a challenging market at the beginning of the year. Conforama continued to reposition its product offering and roll out its new store layout.
Outside of France, activity was penalized by a poor performance in Italy, which was down by 4.0% in a very difficult market. Outside of Italy, sales were virtually stable.
In France, the 6.9% increase in revenues reflected growth at Fnac stores and the development of the Fnac.com, Fnac Eveil et Jeux, and Surcouf subsidiaries. Technical products grew by 6.4% over the quarter, thanks to substantial volume growth. Books and music grew by 7.6%.
Outside of France, Fnac continued to develop, posting 12% growth over the quarter and double-digit growth in almost every country where it has operations.
Revenues declined 1.4% in the quarter. In accordance with the new IFRS standards, this figure does not take into account sales from concessions, which rose by 16.7% in the period.
Total merchandise sales, including concession and non-concession sales, grew by 2.2% in the department stores. Excluding concessions, department store sales fell by 1.1%, mainly because two to three days in the traditional promotional period were moved to April from March.
The Sports division (Citadium and Made In Sport) declined by 3.5%, due to a particularly challenging athletic footwear market at the beginning of the year.
The company's 1.3% sales growth reflects the healthy performance in France and abroad of all of the French brands, and particularly La Redoute (up 2.2%) and the Children and Family division (up 3.4%). In France, La Redoute grew by 2.6% while the market fell by 2%.
In geographical terms, after the improved trend observed in the fourth quarter of 2004, Redcats confirmed its rebound in the U.S. with 7.2% growth in the first quarter, while Redcats UK posted growth of 1.5%. On the other hand, the market remained sluggish for Redcats Nordic.
Redcats continued to grow in e-commerce, posting a 36.2% increase in on-line sales to EUR 235.6 million in the quarter. On-line sales represented 22.3% of the company's revenues in the first quarter of 2005, compared with 16.3% in the first quarter of 2004.
Sales at CFAO advanced 3.5%, reflecting growth in the automotive business (up 3.1%), pharmaceuticals (up 3.8%), and technology (up 14.9%).
Sales declined in French speaking Sub-Saharan Africa but grew sharply in English-speaking Sub-Saharan Africa and North Africa, which had strong momentum.