Luxury brands did it again for fashion giant PPR, pushing net income up 5.9 percent to (EURO)477 million ($585 million) in the first half of the year despite struggles at sportswear brand Puma.
The global economic slowdown and Europe's debt crisis have hit the retail sector hard as consumers cut down on spending. Amid those difficulties, the company said Thursday that its Puma brand saw recurring operating income drop 10.7 percent in the first half of the year.
The brand is stepping up a campaign to streamline its operations, but the group warned that it would continue to be a drag on the group's performance in the second half while that plan is put in place.
By contrast, the luxury sector has remained almost untouchable in the crisis. Sales in the high-end division rose 30.7 percent in the January-to-June period over last year at PPR, which is behind such names as Gucci and Bottega Veneta. Overall, the group's revenues rose 16.7 percent to (EURO)6.4 billion ($7.9 billion).
PPR has been pursuing a strategy to capitalize on the strength of luxury goods, and is in the process of jettisoning some of its underperforming retail brands. Profits from only continuing operations rose 18 percent - an indication of the strength in the group's future.