French conglomerate PPR has reinvented itself over the past decade, and completed that process with a change of name in summer 2013 to Kering. It now sees itself as a specialist in two main sectors of luxury and sports lifestyle. Gucci Group, which PPR acquired in 1999 in a bruising takeover battle with LVMH, is the umbrella for all its high-end fashion and accessories brands, and is the global #3 in that sector behind LVMH and Richemont. The sports lifestyle division has been constructed around sportswear company Puma, acquired in 2007 and a distant #3 behind Nike and Adidas. All of the group's older subsidiaries have been progressively sold off, including most of a substantial mail order business built around La Redoute and other catalogues. Entertainment retailer Fnac was spun off to shareholders in 2013, and the old PPR's last survivor, the main La Redoute catalogue business, was sold to management in 2014. In another change of strategy, Kering announced plans to spin off Puma to shareholders in 2018. See also:
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Who are the competitors of Kering? See Fashion & Clothing Sector
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Adbrands Weekly Update 2nd Aug 2018: There were excellent half-year results from the luxury sector. The brightest star was Kering, the French luxury group best-known for Gucci and Yves St Laurent. Echoing a phenomenal performance in 2017, it reported a leap of just under 34% in sales for the first half of the current year to €6.4bn. That included a jump of 45% in comparable sales from North America and almost 38% in Asia Pacific excluding Japan. Gucci alone reported global organic growth of 40%, and the brand is expected to hit full-year sales of €8bn. Net income for the half almost tripled to €2.4bn, though half of that sum came from the sale of shares in Puma. This marked the group's sixth consecutive quarter of revenue growth above 35%. LVMH also performed well, though not quite as spectacularly as Kering. Organic growth for the half was 13% to €10.85bn, including a 16% increase at the core fashion & leather goods business. Watches & Jewellery and Perfume & Cosmetics did even better with a lift of 20% and 17% respectively. The best results, though, came from the bottom line: profit for the first half soared by 41% to €3bn. Prada too, which has been struggling to regain its balance in the past couple of years, delivered its best results for several quarters. Reported sales were up 3% for the half (or 9% at constant exchange rates) while net profits rose almost 11%.
Adbrands Weekly Update 15th Feb 2018: Luxury is clearly back on a hot streak again. In the wake of strong figures from L'Oreal Luxe and LVMH, Gucci parent Kering reported what CEO Francois-Henri Pinault rightly described as "phenomenal" figures for full year 2017. Group revenues jumped by 25% to almost €15.5bn, while net income more than doubled to €1.8bn. All the growth came from the brands themselves, with the Gucci brand alone registering an extraordinary 42% jump in revenues to over €6.2bn, even with a slight negative drag from currencies, while YSL managed 23%. It wasn't just luxury. Even Puma sportswear delivered a 15% lift, topping €4bn for the first time at almost €4.2bn ahead of its planned spin-off.
Adbrands Weekly Update 18th Jan 2018: Gucci and YSL owner Kering is to quit the sportswear business with a plan to spin off most of its stake in Puma to shareholders. It will retain around 16% of Puma's equity but distribute the rest of what is currently an 84% holding among Kering shareholders. A small proportion of Puma shares are already publicly quoted. The Pinault family's private investment group Artemis will become the biggest shareholder with around 29%. Instead Kering will focus its attentions purely on luxury brands. It also plans to sell its boardsports apparel and accessories brand Volcom.
Adbrands Weekly Update 3rd Aug 2017: Results from luxury to sportswear group Kering appeared to reinforce the renewed dynamism at the high-end of the fashion market. Hot on the heels of strong performance from sector leader LVMH, Kering reported a 78% surge in net profits for the first half to €826m on revenues up over 25% to €3.7bn. Currency played only a minimal role, and almost all the growth was organic, fed primarily by a huge surge at core brand Gucci, where sales jumped by over 40% in the half, and operating profit by 69%. YSL's sales were up almost 29%. "The first half of the year has definitely been one for the record books," said group managing director Jean-Francois Palus. He described the dramatic leap in performance as "unparalleled in the world of luxury". Kering's sport and lifestyle division, which revolves around Puma, also did well with half year revenues topping €2bn for the first time.
Adbrands Weekly Update 1st May 2014: Luxury group Kering announced the retirement of Alexis Babeau, who has headed its luxury goods division, comprising Gucci, Bottega Veneta, YSL and other brands. Patrizio di Marco remains CEO of the Gucci brand business, and now reports directly to group CEO Francois-Henri Pinault, alongside two newly appointed executives. Bottega Veneta chief Marco Bizzarri becomes CEO of the group's other couture & leather goods businesses, while Albert Benoussan joins from Louis Vuitton as CEO of watches & jewellery.
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