Paris–French retail and luxury group PPR (PRTP.PA) posted a 1.3% growth, its first increase after five consecutive quarters of declines. The report further fuels predictions that the luxury market is on the rebound this year.
The majority of the increase came from Gucci Group, which accounts for the bulk of PPR’s valuation, with comparable sales up 6.1% and the Gucci brand alone up 5.3% in the first three months of the year.
As has been the case with other luxurygoods majors’ recent reports, most of the sales increases occurred in China and other Asian markets except Japan. “While emerging countries continue to drive the growth in sales (about a 15% increase) all mature market countries apart from Japan also posted solid improvements,” PPR stated. Leathergoods sales grew 9% at Gucci Group, too.
Moreover, Gucci Group’s sales growth compares with a 10% rise in comparable first-quarter sales at competitor LVMH’s fashion and leathergoods division and Burberry’s first-half rise of 6% in same store sales.
The PPR results also stated that Gucci brand business booked double-digit increases for its Fall/Winter collections compared to last year. Sales of timepieces in this division, up 36% in the first quarter, confirmed “the marketing momentum of this product category.”
Similarly, Bottega Venta showed an 11% increase in comparable store sales with double-digit growth in all regions except Japan.
“The sharp improvement in sales of all our businesses provides us with a solid platform to speed up revenue growth throughout the year,” said PPR chairman and ceo Francoise-Henri Pinault in a statement. Citing successful launches of new sales and marketing plans, cost-control efforts, Pinault said, “We should deliver a healthy progression in operating and financial performances in 2010.”
PPR, which also includes retailers Fnac, Conforama and Redcats, on Wednesday posted total sales of $5.26 billion, roughly in line with expectations of $5.39 billion based on Reuters’ poll of 10 analysts. In turn, Credit Suisse Group AG raised PPR to “outperform” from “neutral.”