Sales of sport and lifestyle products at the French conglomerate PPR rose by 17.8 percent to €923.7 million in the third quarter. Comparable sales were up by 9.9 percent. Since July 1, the division consolidates Volcom. The American brand of surf, skate and snowboard clothing and accessories was bought by PPR in a deal valuing the company at nearly $608 million. The French group also bought Volcom's eyewear brand, Electric.
The bulk of the division's revenues were generated by Puma, which released its third-quarter results ahead of its parent company (SGI Vol.22-No. 42+43). The German company booked a 7.3 percent rise in sales to €841.6 million. Comparable sales were up by 10.2 percent.
Volcom's top line reached €82.1 million, representing a 7.0 percent rise on a comparable basis. Apparel sales, which total 89 percent of Volcom's turnover, rose by 6 percent, while accessories increased by 12 percent driven by Electric.
Volcom enjoyed strong growth in North America, which accounts for more than half of the company's revenues. Growth was more moderate in Western Europe and satisfactory in the Asia-Pacific region, PPR said in a conference call. The group stressed the “excellent showing” of Volcom's directly operated stores.
PPR's overall revenues rose by 8.0 percent to €3.857 billion in the quarter. The luxury goods division bolstered sales by 23.1 percent to €1.281 billion while the retailing business suffered a 5.5 percent decline to €1.655 billion. The group expects to book sustained growth in full-year revenues and finish the year with improved financial results.
The company added that it is not interested in a domination agreement for Puma after having increased its stake in the company to more than 75 percent in August. PPR's deputy chief executive and chief financial officer, Jean-François Palus, said the move would be a waste of money. Domination agreements are a takeover structure used in Germany allowing acquirers to take full control of a company without buying all the shares.
PPR added that it is pursuing talks to sell its Redcats retailing business with a few potential investors who have expressed interest in the activity. In September, the group withdrew an auction for Redcats as bids failed to reach its expectations of at least €1.5 billion.