France's Pinault Printemps Redoute, best known for its controlling interest in luxury goods maker Gucci Group NV, on Thursday reported a 58 per cent drop in first-half net profit which is partly blamed on the slumping luxury sector.

Net profit collapsed to 118.3 million euros from 283 million euros a year ago. One-off charges for asset sales - ahead of a buyout of Gucci minority holders next spring - generated a loss of 207 million euros it said.

Despite tough trading in the luxury market, PPR is increasing its focus on these higher-margin products. It is preparing to pay about 3 billion euros to gain 100 per cent control of Gucci, the world's third-biggest luxury player.