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Today executives from PPR Group held court with four business reporters over lunch at Christie’s New York.
Present from the fashion powerhouse were Laurent Claquin, the newly appointed head of PPR Americas, and Alexis Babeau, the Paris-based managing director of the luxury division. PPR, which is run by François-Henri Pinault, owns such brands as Gucci, Bottega Venetta, Balenciaga, YSL, Alexander McQueen and Stella McCartney, among others. All told, more than 47,000 work for the France-based company.
The group has recently opened an Americas office above the YSL store on 57th Street in Manhattan; Claquin moved here from Paris two months ago to oversee the effort, which will have fewer than 10 people on staff full time.
We talked over roast fish and white wine about how PPR manages its stable of luxury brands while maintaining their unique identities–several of its holdings are old, historically family-run brands with cult followings.
One example of finding that balance: maintaining the distiction in materials between Gucci bags (made of calf leather) and of Cheap Gucci Handbags (made of sheepskin). Using one type of leather for both brands would significantly increase profit margins, Babeau admitted, “but it would spell the beginning of the end” for brand identity and authenticity.
We also talked about the role of emerging markets–especially China, India and Brazil–in the company’s overall growth strategy.
“We have the ability in China to be successful with all of our brands,” Babeau said. (Japan, he said, has the most mature luxury market in the world.) Last year the luxury division brought in revenue of 5 billion euros ($6.36 billion) with Gucci producing more than half of the sales. Net income rose 26.4 percent to 1.05 billion euros ($1.36 billion) group-wide.
Among the other points we discussed:
- Consumers of luxury goods in Asia are much more balanced between men and women when it comes to how much they buy than in America, where women are by far the primary purchasers.
- That said, one of the largest factors driving growth in the global luxury sector is the desire of more men to “take better care of themselves,” as Babeau put it.
Presumably that means dressing in higher-quality clothes, wearing fine fragrances, collecting high-end Cheap Gucci Shoes, buying leather goods, etc. (GDP, of course, is the first thing that drives–or diminishes–sales in any particular region for PPR. Taxes, duties and international tariffs also contribute heavily to how well PPR can operate abroad.)
