French group concentrates on luxury brands
Profits at French luxury retail group PPR nearly halved last year as it continued to shed non-core businesses, transforming itself from a diversified conglomerate into a luxury retail group focused on its Gucci arm.

Net profit fell to Eu535 million (£367.1 million) last year, from Eu1.09 billion (£748 million) in 2004, as PPR sold off businesses to help pay for its 2004 buy-out of minority shareholders in Gucci Group.

As part of its transformation, PPR has sold its timber and construction materials units, as well as electrical equipment manufacturer Rexel and its consumer credit division.

Taking out the effects of discontinued activities plus accounting changes, PPR said net profit rose 11.2 per cent to Eu539 million (£369.9 million) as buoyant luxury sales offset a 0.7 per cent drop in its general retail division, especially furniture chain Conforma.

The company said Gucci Group drove a 35 per cent increase in operating profit in the luxury segment to Eu390 million (£267.6 million).

PPR said its retail brands - which include Redcats catalogues and Printemps department stores -'all posted healthy performances in France and abroad, with the exception of Conforma'.