Gucci-Owner PPR Said to Consider Changing Its Name to Kering which is supposed to evoke the idea of caring and signal a new chapter in the company’s development

March 4, 2013 Leave a comment

Gucci-Owner PPR Said to Consider Changing Its Name to Kering

PPR SA (PP), the French owner of Gucci and Puma, is considering changing its name to Kering to cap its transformation into a luxury and sporting-goods specialist, according to people with knowledge of the plan.

The re-branding of Paris-based PPR may be announced this month, said the people, who asked not to be identified because the information is confidential. The name, which would be the company’s fifth since listing on the Paris stock exchange in 1988, is supposed to evoke the idea of caring and signal a new chapter in the company’s development, one of the people said.PPR, known formerly as Pinault-Printemps-Redoute and before that as Pinault-Printemps and Pinault SA, is disposing of retail assets it amassed in the past two decades to focus on luxury and sporting goods, which are more profitable and have better growth prospects. Chief Executive Officer Francois-Henri Pinault’s goal is to lift PPR’s sales to 24 billion euros ($31 billion) by 2020 from 9.7 billion euros in 2012.

Louise Beveridge, who heads communications at PPR, declined to comment.

The company, which on Feb. 25 agreed to sell two home- shopping brands to a Swedish buyout firm, aims to complete its transformation this year after spinning off the Fnac media and consumer-electronics chain and selling online retailer La Redoute, Pinault told Bloomberg News Feb. 15. Once that happens, PPR’s name would no longer reflect businesses it still owns, having sold department-store operator Printemps in 2006.

Existing Equity

“If you are changing your strategy and the existing equity that you’ve got of a brand doesn’t really have purpose in the market that you can see coming round the corner, then, to get something which demonstrates that you have a particular point, purpose, vision that is appropriate for your brand, can mean that it’s worth signaling a new name,” said Graham Hales, London CEO of brand consultant Interbrand.

With a new name and focus, PPR, whose brands include handbag maker Bottega Veneta and surf and snowboarding clothier Volcom, aims to boost its share price, which has traded at a discount to its luxury peers because of its retail businesses.

While PPR’s price-to-earnings multiple will probably rise after disposing of Fnac and the remainder of online fashion retailer Redcats, it may still trail rivals’ because of the sports lifestyle division, according to Luca Solca, an analyst at Exane BNP Paribas.

A “re-rating is hampered by PPR having turned into a different kind of conglomerate,” Solca said.

To contact the reporter on this story: Andrew Roberts in Paris at aroberts36@bloomberg.net

Filed under Macro Trends

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