April 23, 2013 11:07 pm

PPR set to add two luxury brands to fold

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Gucci owned by PPR©Bloomberg

PPR, the French group behind Gucci and Bottega Veneta, is on track to add two more Italian luxury brands to its fold, underlining its transformation into a specialist purveyor of high-end wares.

The group, which is changing its name to Kering in June, on Tuesday announced the acquisition by Gucci of Richard Ginori, a Tuscan ceramics maker, which it has rescued from bankruptcy.

PPR is also expected shortly to confirm its acquisition of jeweller Pomellato, having seen off luxury group Prada and the Italian state investment fund in talks for the Milanese brand, according to people familiar with the matter.

The moves underscore the transformation of PPR under François-Henri Pinault, chairman and chief executive, who has sold most of its mass market retail businesses, including Printemps and its catalogue group Redcats, in order to focus on higher-margin, faster-growing luxury.

It also highlights how Italy, in the throes of a lengthy economic crisis, has become a hunting ground for wealthy international investors seeking luxury brands ripe for expansion in Asia and beyond.

Richard Ginori, a 300 year-old tableware company, will cost Gucci €13m to rescue from the bankruptcy court. Gucci chief executive Patrizio di Marco said he was planning significant investment in the brand, including in its Tuscan factory.

“It had to be saved. It’s a giant of a brand, like Gucci is a giant, but [Richard Ginori] was hurt by the wrong strategic choices over 20 years,” Mr di Marco said.

He said that while Gucci would preserve the Richard Ginori brand it would also use the ceramics maker to create Gucci-branded luxury porcelain, a move that feeds into a demand by Asian and Middle Eastern consumers to buy branded luxury goods for every aspect of the home.

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Analysts at Cheuvreux estimate that Pomellato, with which PPR has held on-off talks for more than a year, has an enterprise value of €270m to €300m, relatively small beer for the French group, which recorded an annual turnover of €9.7bn in 2012.

But the acquisition, which analysts expect to be announced in the next days, would be a big step by PPR into the branded jewellery segment, one of the fastest-growing areas in luxury goods.

PPR’s rival LVMH began a rush among luxury goods group to acquire jewellery houses after it staged a buyout of Roman jeweller Bulgari in 2011. 

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