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2004 First Quarter Sales

19/04/2004 - PPR

<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
o         Comparable "New PPR" sales* up 7.1%

o         Comparable "New PPR" sales * outside <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />France up 10.4%

o         Rexel comparable sales * growth across all regions up 1.3%

Serge Weinberg, Chairman of the Management Board of Pinault-Printemps-Redoute, made the following statement:
"All brands of the 'New PPR', together with Rexel, achieved strong top-line growth in France and internationally during the first quarter of the year. This outstanding performance in a lackluster economic context underscores the strength of our concepts. Retail companies continued to gain market share thanks to the success of the Clio customer satisfaction program. In Luxury Goods, the later reported quarter confirms the sales rebound underway since mid-2003. Rexel has turned the corner following 11 consecutive quarters of declining revenues. I am convinced that the Group's companies and brands are poised to continue outperforming their markets."

in EUR million

Q1 2004

Q1 2003

Change

Reported

Comparable*

RETAIL**

3 426,6

3 254,1

+5,3%

+6,2%

LUXURY GOODS

741,7

714,8

+3,8%

+11,5%

NEW PPR

4 168,3

3 968,9

+5,0%

+7,1%

Rexel

1 597,8

1 660,8

-3,8%

+1,3%

Sold Financial Services activities

0,0

683,3

(Inter-company sales)

(6,2)

(8,6)

TOTAL

5 759,9

6 304,4

-8,6%

+5,5%

(*) On a comparable Group structure, exchange rate and day-year basis. The change on a reported basis includes the impact of the disposals of Pinault Bois & Matériaux and of Guilbert's contract business.
(**) Apparel and Lifestyle Division, Home and Leisure Division, Kadéos,CFAO.

The Group and the New PPR

· Pinault-Printemps-Redoute: Group sales for the first three months of 2004 rose to EUR 5,759.9 million, representing a 5.5% increase on a comparable structure, exchange rate and day-year basis. On a reported basis, sales were down 8.6% compared to the first quarter of 2003. This reflected the negative effects of changes in Group structure, which totalled EUR 726.5 million, connected with the strategic disposals of Pinault Bois & Matériaux and the "contract" business of Guilbert in the first half of 2003, together with EUR 174.5 million in unfavourable exchange rate changes, mainly due to the weakness of the US dollar, and to a lesser extent the Japanese yen and Swiss franc, in relation to the euro.

· "New PPR": Sales of the "New PPR" rose to EUR 4,168.3 million, representing a 5% increase on a reported basis in spite of the unfavourable currency impact. Sales were up 7.1% on a comparable structure, exchange rate, and day-year basis.

Retail

When adjusted for changes in Group structure, exchange rates and number of days, Retail division sales climbed by a steady 6.2% compared to the prior-year period. The Home and Leisure division (+7.6%) confirmed the sustained growth reported in the previous quarter, and the Apparel and Lifestyle division reported strong first-quarter sales (+2.5%), despite a weak environment for apparel retail.

Retail activities turned in an outstanding performance in France (+4.3%). International sales rose by 9%, reflecting Retail activities increased penetration into overseas markets. Factors underpinning this performance included excellent sales growth in Europe excluding France (+8.9%) and Africa (+14.5%) as well as the first signs of recovery in the United States (+0.3%). International sales accounted for 42.4% of total Retail division sales in the first quarter of 2004, up from 41.3% in the first quarter of 2003.

Internet sales increased dramatically in the first quarter of 2004. Internet sales generated by Retail companies climbed 34.5% on a reported basis and 44.3% on a comparable basis to EUR 214.8 million by the end of the quarter. Overall, e-commerce accounted for 6.3% of total Retail sales, compared to 4.9% in the year-earlier period. This performance strengthens Pinault-Printemps-Redoute's leadership positions in online retail in Europe.

Home and Leisure Division

·          Conforama

Conforama sales rose to EUR 718.8 million, up 4.9% on a reported basis and up 5.1% on a comparable basis. Sales growth was sustained in France (+3.9%) and even stronger on international markets (+7.7% on a comparable basis).

In France, sales growth was primarily attributable to commercial successes, the initial results from the company's brand repositioning and the new store layout introduced in 2003. The 13 stores that were adapted to the new format in 2003 reported spectacular increases in sales (+20.8%) during the first quarter. The largest store operating under the new format was inaugurated in Colombes, in the Paris suburbs, at the end of March while two stores were opened in the Toulouse area. The company plans to open three new stores and adapt 15 stores to the new format in France in the second half of 2004.

Conforama continued its expansion outside France, recording sales growth in all of the countries in which it operates. Growth was boosted by the outstanding performance of Conforama stores in Spain (+26.6%), despite the slowdown that followed the tragic events of March 11 in Madrid, Portugal (+25%), led by the success of the new store opened in Albufeira in 2003, and Croatia (+57.4%), following the opening of two new Emmezeta stores last year. Sales were also up in Switzerland (+0.6%), despite challenging trading conditions, Italy (+3%), Luxembourg (+8.8%) and Poland (+13.8%). International sales accounted for 32.4% of total sales compared to 32.1% in the prior-year period. Three new stores will be opened in Spain in the second half of 2004. In the fourth quarter, Conforama will inaugurate its first store in Italy which will join the 18 Emmezeta superstores in the country.

·          Fnac

Sales at Fnac climbed to EUR 925.1 million in the first quarter of 2004, up 11% on a reported basis and 9.6% on a comparable basis. Sales growth was strong in France (+7.4%) and particularly buoyant overseas (+17% on a comparable basis).

In France, sales growth was once again driven by technical products, thereby reflecting Fnac's positioning as a pioneer in this category. Sales of books and music posted a solid performance.

During the quarter, sales of consumer electronics grew by 10%, and personal computer equipment by 13.9%. Book sales continued to rise, up by 5.4%. CD and DVD sales dropped slightly (-0.5%) during the quarter and reported 4.8% growth in March.

The French subsidiaries continued to record solid gains, led by Surcouf (+12.3%) and the Children's division (12.4%), which comprises the Eveil & Jeux and Fnac Junior retail chains.

First-quarter sales increased across all international markets, including Belgium (+1.5%), Portugal (+12.3%) and Spain (+17.3%), where the company has long been active. Sales growth was even more marked in countries where Fnac is a relative newcomer. On a comparable basis, sales grew by 26.5% in Switzerland and 34% in Brazil, in spite of the country's economic difficulties, and by 65.6% in Italy. International operations contributed 23% of the company's total sales, compared to 21.5% in the first quarter of 2003. In the second half of 2004, Fnac will open its second store in Madrid and its eighth store in Portugal (Albufeira). Two new stores will also be added in Brazil (Curtiba and Brasilia), bringing the total number of stores in Brazil to six.

After having increased by a factor of 1.5 in 2003, the company's Internet sales posted a spectacular growth in the first quarter of 2004, and now account for 3.5% of Fnac's total sales.

Apparel and Lifestyle Division

·          Printemps

Printemps sales rose to EUR 228.7 million in the first quarter, a 2.9% increase on a reported and 2.3% on a comparable basis. This was an excellent performance in spite of extremely challenging conditions in textile markets.

Following a dip in the fourth quarter of 2003, department stores sales posted a 1.7% increase in the first quarter of 2004. Sales at the Printemps Haussmann store rose by 1.4%, while the Printemps Chain reported a healthy 1.9% increase. Factors contributing to this performance included reallocation of retail floor space.

The Sports division continued to perform outstandingly, posting a 12.1% rise in first-quarter sales. Citadium sales were up 3.2% while Made In Sport generated a 24.2% increase in sales.

The newly refurbished Madelios store was inaugurated on March 25, 2004. This exclusive men's department store, located in the Madeleine district of Paris, reported a 2% increase in sales in the first quarter of 2004.

·          Redcats

Redcats sales rose to EUR 1,077.9 million in the first quarter of 2004.

Home shopping
Redcats home shopping sales totalled EUR 1,057.8 million in the first quarter. Sales were down 1.1% on a reported basis, reflecting a EUR 47.8 million negative impact from currency changes, mainly due to the depreciation of the US dollar against the euro.

Sales were up 1.9% on a comparable basis, reversing the declines recorded in the past two quarters. This was a particularly encouraging performance given the unfavourable environment for apparel retail.
Sales in France and in Europe excluding France were up 2.3% and 3.1% respectively, on a comparable basis. In the US, sales rose by 0.3%, reversing the trends of previous quarters. Redcats generated 51.5% of its total sales outside France.

Internet sales grew to EUR 177 million, representing a 45.2% increase on a comparable basis. Internet sales account for 16.7% of Redcats' total sales, representing a 4.4 point increase compared to the first quarter of 2003.

La Redoute sales rose by 0.8% in the first quarter of 2004. In France, sales fell by 2.2%. Sales declined by 7.5% in January, in contrast to an exceptionally high 12.1% increase in the same month in 2003. Over subsequent weeks, La Redoute regained ground in its home market and outpaced the sales growth of its competitors. La Redoute continued to recruit customers and had 75,000 additional customers compared to the first quarter of 2003. The specialised catalogues (Anne Weyburn, AM/PM, La Maison de Valérie) went from strength to strength, recording a 17.7% increase in sales. La Redoute also reported sustained growth in sales outside France (+9.9%), driven by sharp increases in the United Kingdom (+8.1%), Sweden (+17.3%), Switzerland (+17.3%), the US (+24.2%) and Spain (+51.8%). This reflects the company's increased presence on international markets, which now account for 24.6% of its sales in 8 countries.

Sales generated by the specialised catalogues increased by 7.3% on a comparable basis thanks to the buoyant growth recorded by the Seniors catalogues and the solid increases posted by Children and Family catalogues. The Seniors catalogues recorded a 10.3% increase in sales, driven by excellent growth in France (+10%) and, in particular, by Daxon (+15%). On international markets, the Seniors catalogues reported a 11% increase in sales thanks to the contributions from Daxon in the United Kingdom and in Germany. Sales in the Children and Family catalogues grew by 4.2%, as the decline in Cyrillus sales (-18.8%) was largely offset by the sharp increase in Vertbaudet sales (+17.6%) thanks to the success of the spring-summer collection and the very favourable response from customers to the new children's bedware catalogue "Histoires de Chambres".

In the United Kingdom, the UK brands achieved 1.5% growth on a comparable basis. This marked improvement was largely driven by enhancements to Empire's merchandise offering and catalogue marketing, by sales development initiatives in the sales agent network, and by the encouraging results from the new direct-sales catalogue, The Store, which is targeted at younger consumers.

In Scandinavia, sales declined by 6.2% due to contrasting trends which saw strong growth in sales by Josefssons, in particular in Norway, and a slump in sales by Ellos due to a poor performing spring-summer catalogue. The Nuova catalogue for seniors, which was launched in 2003, was very favourably received by customers.

In the US, Brylane achieved flat sales on a comparable basis, thereby reversing past declines. The Home-Lifestyle product group reported a dip in sales (-0.5%), on the back of a particularly strong first quarter in 2003. Brylane Wishes and Brylane Kitchen are pursuing their development. Sales of the Misses division were virtually unchanged (-0.3%) due to the mixed performances of Lerner (+23.9%), which has completed a successful brand repositioning, and Chadwick's (-4.8%), which is currently being repositioned. The Special Sizes apparel group grew by 0.3% in a challenging environment. This performance was notably attributable to the growth achieved by Lane Bryant (+9.6%), while Roaman's continued its repositioning.

Non-divested financial services businesses
Sales of non-divested financial services businesses amounted to EUR 20.1 million in the first quarter. Sales increased strongly on a reported basis (+37.7%) and on a comparable basis (+41.5%).

·          Orcanta

The women's lingerie store chain reported EUR 13.1 million in sales, up 7.4% on a reported basis and 6.4% on a comparable basis.

Kadéos

Europe's leading gift voucher provider maintained a steady pace of expansion. On a comparable basis, revenues (commisions on voucher issuances) rose by 19.2% to EUR 3.1 million in the first quarter of 2004.

CFAO

CFAO's sales climbed to EUR 455.6 million in the first quarter, representing an increase of 10.8% on a reported basis and of 13% on a comparable basis. This sustained increase, despite declines in certain industrial activities, reflected the excellent performances recorded in its main businesses and across all regions.

Excluding pharmaceuticals and technologies business sales grew by 10.9% as persistent difficulties in Niger, Cameroon and Gabon were largely offset by outstanding performances in the French overseas departments and territories (+27% on a comparable basis), North Africa (+47.2%) and southern and eastern Africa (+10.3%).

The pharmaceuticals business continued to post strong growth, achieving a 15.3% increase in sales on a comparable basis. Sales edged up by 8.8% in the French overseas departments and territories and by 22.9% in Africa, thanks to particularly strong gains in a number of countries and the stellar growth recorded in Egypt (+109.4%).

CFAO's technologies business continued its fast-paced growth and recorded a 30.7% increase in sales on a comparable basis. The largest gains were recorded in Algeria, Senegal, Gabon and Nigeria.

Luxury Goods

Sales of the Luxury Goods division reflect Gucci Group activity for the period November 2003 to January 2004.

Luxury Goods sales rose to EUR 741.7 million, representing an increase of 11.5% on a constant structure and exchange rate basis and a 3.8% increase on a reported basis. This figure includes EUR 49.7 million in negative currency effects which were primarily related to the depreciation of the US dollar and Japanese yen in relation to the euro.

Gucci: First quarter-sales grew to EUR 466.1 million, up 5.4% on a reported basis. In the first quarter, retail sales increased by 15.5% on a constant exchange rate basis, driven by excellent growth in Europe (+13.5%), the US (+25.2%), Japan (+8.5%) and Asia excluding Japan (+25%). Sales to franchise stores, duty-free and department and specialty stores increased by 7.2% on a constant exchange rate basis. Leather goods and footwear sales were particularly strong with an increase in retail sales on a constant exchange rate basis of 21.2% and 13.2% respectively.

Yves Saint Laurent sales rose by 2.4% on a reported basis to EUR 42.7 million. Retail sales soared by 44.9% on a constant exchange rate basis, fuelled by buoyant growth in the US (+45.3%), Japan (+67.5%) and Asia excluding Japan (+106.4%). In Europe, retail sales expanded by 27%. Leather goods sales continued to grow strongly (+34.7%) thanks to the success of the "Saint Tropez" handbag and the new "Mala Mala" line. Footwear sales increased by an impressive 20%.

YSL Beauté sales were down 3.5% at EUR 155.5 million. Sales of YSL make-up and skin care products increased respectively by 9.6% and 25.2% on a constant exchange rate basis.

The other brands reported sales of EUR 77.3 million, up 11%. Bottega Veneta recorded a 52.5% increase in retail sales on a comparable exchange rate basis. This excellent performance was attributable to the brand's strength and to the outstanding increases in sales in the US (65.3%), Asia excluding Japan (121.8%), Japan (40%), and Europe (35.3%). Sergio Rossi's retail sales increased by 29.7% on a comparable exchange rate basis, notably thanks to the success of the "Cruise" collection. Emerging brands, Stella McCartney, Alexander McQueen and Balenciaga all recorded strong increases in first-quarter sales.

REXEL

Rexel sales rose to EUR 1,597.8 million in the third quarter, representing a 1.3% increase on a comparable basis. The 3.8% decline on a reported basis was attributable to a EUR 57 million unfavourable change from currency fluctuation, chiefly from the depreciation of the US dollar against the euro, and the EUR 52 million negative effects of changes in the scope of consolidation, due to the Gardiner disposal.

After eleven consecutive quarters declining sales, Rexel achieved an increase in sales on a comparable basis in the first quarter of 2004.

Comparable sales increased in all of the regions in which Rexel operates: +0.3% in Europe, + 1.8% in the Americas, + 6.6% in Asia-Pacific.

In March, the 3.2% increase in comparable sales provided a further indication of the turnaround underway at Rexel.

in EUR million

Q1 04

Q1 03

Change

Reported

Comparable*

Conforama

718,8

685,3

+4,9%

+5,1%

Fnac

925,1

833,7

+11,0%

+9,6%

Mobile Planet

4,3

5,0

-14,0%

+0,0%

Lesiure and Household Goods division

1 648,2

1 524,0

+8,1%

+7,6%

Printemps

228,7

222,3

+2,9%

+2,3%

Redcats

1 077,9

1 084,3

-0,6%

+2,5%

Orcanta

13,1

12,2

+7,4%

+6,4%

Apparel and Lifestyle division

1 319,7

1 318,8

+0,1%

+2,5%

Kadéos

3,1

+19,2%

CFAO

455,6

411,3

+10,8%

+13,0%

RETAIL