PPR's core luxury, sport and lifestyle units posted a 23.2 percent increase in sales in the first quarter to €2.345 billion. On a comparable basis, the growth was limited to 11.6 percent. Including Fnac and other retail operations but without Redcats, which is about to be sold, PPR's overall revenues from continuing operations rose by 15.4 percent to €3.258 billion in the quarter.
The luxury goods business underpinned the group's top line thanks to double-digit growth in all regions. It boosted sales by 29.1 percent to €1.458 billion, with all major brands posting double-digit growth rates a rise of 17.8 percent on a comparable basis. The group continued expanding its network of luxury stores, which stood at 863 doors at the end of March thanks to 27 net openings and the addition of 35 Brioni stores.
Gucci registered a 16.0 percent rise in sales to €848.0 million, supported by a shift to higher-priced goods. The brand's comparable revenues rose by 12.0 percent, driven by a 13.0 percent increase in retail, which represents about 75 percent of the overall tunrover. Online sales increased by 40.0 percent and are starting to have a visible impact on the top line. The group pursued its policy of selective wholesale distribution.
Comparable sales rose by 10.0 percent for Gucci in Western Europe, by 9.0 percent in North America, by 16.0 percent in Japan, by 8.0 percent in Asia-Pacific and by 53 percent in other countries. South Korea and Taiwan underperformed due to the restructuring of some stores, while in Greater China sales rose by 15 percent, led by mainland China, up by 19 percent. Italy underperformed the rest of Western Europe, growing by only a single-digit rate. Gucci had 390 directly operated stores at the end of March, 14 more than a year earlier. The brand plans about 45 net openings in 2012.
Bottega Veneta's sales surged by 39.0 percent to €218.0 million, with retail growing slightly faster than wholesale. In the meantime online sales doubled thanks to a strong performance in Japan, the U.S. and the U.K. Comparable sales were up by 33.0 percent. The brand has put an end to its policy of discounting leathergoods, resulting in a sharp increase in prices that did not slow down growth. The brand opened an additional workshop in Italy to secure production capacity. Bottega Veneta had 171 DOS at the end of the quarter, one more than a year earlier.
Yves Saint Laurent bolstered sales by 43.0 percent to €109.0 million. On a comparable basis, turnover rose by 40.0 percent, with Western Europe up by 34.0 percent, North America by 48.0 percent, Japan by 53.0 percent, Asia-Pacific by 63.0 percent and other countries by 5.0 percent. The brand had 86 DOS against 83 a year earlier.
The group's other luxury brands, which include Sergio Rossi, increased sales by 71.0 percent to €283.0 million, sustained by strong growth across all brands and regions as well as the acquisition of Brioni. Comparable sales were up by 20.0 percent, underpinned by a strong double-digit growth rate in fashion and leathergoods. The number of DOS reached 216, lifted by nine openings and the Brioni stores.
PPR said that it is satisfied with the “excellent” double-digit growth rate in orders from the wholesale channel for the Gucci and Yves Saint Laurent brands. PPR expects to book sustained growth in full-year revenues and finish the year with improved financial results.
The sport and lifestyle division increased sales by 14.6 percent to €887.0 million, thanks in part to its acquisition last yar of Volcom. Its comparable sales were up by only 2.8 percent. The bulk of the division's revenues were generated by Puma, whose comparable sales were up by 4.2 percent. PPR denied rumors that it might sell Puma (more on this part of PPR's business in SGI Europe).