Gucci-owner PPR to Be Renamed Kering to Mark TransformationAndrew Roberts
PPR SA, the French owner of Gucci and Puma, will change its name to Kering to cap the company’s transformation into a luxury and sporting goods specialist.
PPR will adopt its new moniker on June 18, Chief Executive Officer Francois-Henri Pinault said at a presentation in Paris today. The company’s fifth name since it listed on the Paris stock exchange in 1988 is supposed to evoke the idea of caring. It is derived from “ker,” meaning home in Breton, a language spoken in Brittany, France, where Pinault’s family comes from, and “ing,” expressing the idea of movement, the CEO said.
“Changing our name is the logical and necessary outcome of the group’s transformation,” Pinault said. “More than just a change in scope or activity that this new name reflects, it expresses the group’s new identity and corporate culture.”
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. Pinault’s goal is to lift sales to 24 billion euros ($31 billion) by 2020 from 9.7 billion euros in 2012.
PPR aims to complete its transformation this year after spinning off the Fnac media and consumer-electronics chain and selling online retailer La Redoute, Pinault said. Once that happens, the name PPR wouldn’t have reflected businesses it still owned. The company sold department-store operator Printemps in 2006 and said Feb. 25 it agreed to sell two home-shopping brands to a Swedish buyout firm.
Kering’s logo features an owl, symbolizing wisdom, while the tag line is “empowering imagination,” Pinault said. In Chinese characters, the company will be known as Kai Yun, which has the connotation of good luck, the CEO said.
“Kering is a name with a meaning, a name that expresses both our purpose and our corporate vision,” Pinault said. The fact that Kering means dried in Indonesian, “completely escaped us,” the CEO said.
Consulting firms Dragon Rouge, Havas Lifestyle and TBWA\ Corporate worked with PPR on the project, which took a year, said Louise Beveridge, who heads communications. The cost of the rebranding is “modest,” she said, declining to quantify it.
With its new 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 by that measure because of the sports lifestyle division, according to Luca Solca, an analyst at Exane BNP Paribas.
Puma, Europe’s second-largest sporting-goods maker that PPR acquired in 2007, is taking longer than anticipated to turn around, Pinault said last month. The replacement for Puma CEO Franz Koch, who is due to leave this month after less than two years in the post, will be announced “in the coming weeks,” he said today. Discussions are “very, very advanced,” he said.
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