FRANCE: Kering H1 profit plummets on Fnac sale
- H1 profit plummeted 64% to EUR173m
- Revenue climbed 1.4% to EUR4.68bn
- Results weighed down by lower sales at sport and lifestyle unit
French luxury and sportswear group Kering, owner of the Gucci, Bottega Veneta and Yves Saint Laurent brands, has seen its first-half profit plummet 64% after it was weighed down by a loss on the sale of its entertainment retail chain Fnac.
The company, which was formerly known as PPR, said net income was EUR173m (US$229.6m) for the six months to 30 June, compared to EUR477m in the same period last year, due to a EUR263m loss on the disposal of Groupe Fnac shares and EUR111m in exceptional write-downs of Redcats' residual assets.
Revenue climbed 1.4% to EUR4.68bn from EUR4.61bn last year and was up 4% on a comparable basis. The group said its luxury division saw sales reach EUR3.08bn, up 5.3% on EUR2.92bn last year, while comparable revenue rose 7.9%.
Chairman and CEO François-Henri Pinault said the company delivered a "solid" performance in the first half. "The luxury division continued to deliver robust growth, gathering momentum in the second quarter and powered by the solid performance in its directly operated stores and its mature markets."
The sport and lifestyle unit, however, posted a 6.3% decline in revenue to EUR1.59bn from EUR1.69bn the prior year and 3.2% on a comparable basis.
"The strength of our brands, their organic growth potential, the good geographic balance of our activities and the commitment of our teams all reinforce our confidence in the group's ability to further improve its performances in the full year," Pinault added.
Looking forward, Kering said the trends recorded in the first six months of 2013 should continue in the second half of the year, Kering maintains its goal of improving its operating and financial performances in the full-year.
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