PPR CEO Francois-Henri Pinault “Uber Optimistic” On Company’s China Prospects
PPR may be on the hunt for its own Shang Xia, a Chinese brand cultivated and supported by Hermes
In the hopes of expanding further into the jewelry space and increasing its already significant footprint in the mainland China market, the French luxury giant PPR is reportedly in talks to acquire an as-yet-unnamed Chinese luxury brand. Coming nearly a year after PPR CEO Francois-Henri Pinault said he was interested in acquiring a Chinese brand “with its own identity” that differentiates itself from European-style luxury items, Bloomberg reports this week that PPR is currently in early-stage talks, with the mysterious acquisition to possibly be completed within this year.
Though China’s luxury market — which has been on a three-year-long tear, is expected to register lower aggregate growth than in 2011, Pinault said in May that he remains “uber optimistic” about his company’s prospects there. PPR’s luxury division, which includes brands like Gucci, Bottega Veneta and Yves Saint Laurent, rose nearly 20 percent in the first quarter of this year, led by a 20 percent rise in emerging markets like China. Luxury demand in the Greater China region may be changing, but it’s not disappearing anytime soon.
Via Bloomberg:
In many ways, PPR’s moves mirror those made over two years ago by Hermès, which launched its own “made in China” luxury brand, Shang Xia (Jing Daily interview) in September 2010. Though we have our very strong suspicions of which brand PPR is hoping to acquire, we’ll hold off on speculation for the moment. One thing we will say that PPR is probably making a smart move looking to acquire a jewelry brand rather than a “soft luxury” label. As Jing Daily noted last week, Chinese high-end consumers are expected to continue — if not ramp up — their purchases of “hard luxury” like gold, diamonds and branded jewelry despite the broader luxury slowdown.