04/17/2003 : 2003 First Quarter Sales

Growth on a comparable basis:

• Group: +2.8%
• Retail: +6.1%
• Retail and Luxury Goods*: +6.2%

In the first quarter of 2003, Group sales totalled EUR 6,304.4 million, up 2.8% on a comparable structural, exchange rate and day-year basis. This confirms the quarterly improvement in business throughout 2002 and the stepped-up growth seen in the fourth quarter of 2002. It notably reflects the strength of the Retail division and the healthy performance of the Luxury Goods division, despite the poor economic environment.

in EUR million	3/31/03 Actual	Change Comparable ***
Conforama	685.3	+5.9%
Fnac	833.7	+7.5%
Mobile Planet	5.0	-5.7%
Leisure and Household Goods division	1,524.0	+6.7%
Printemps	222.3	+1.9%
Redcats	1,084.3	+6.0%
Orcanta	12.2	+12.6%
Apparel and Lifestyle division	1,318.8	+5.4%
Retail **	2,842.8	+6.1%
Luxury Goods	714.8	+6.0%
CFAO	411.3	+7.9%
Subtotal Retail + Luxury *	3,968.9	+6.2%
Rexel	1,660.8	-3.0%
Pinault Bois & Matériaux	329.7	-2.5%
Guilbert	353.6	-2.2%
Business-to-Business	2,344.1	-2.8%
(Inter-company sales)	(8.6)	na
Total	6,304.4	+2.8%

* including CFAO.
** The Retail division now includes the remaining stake in the Credit and Financial Services businesses (Redcats Finance UK and Ellos Nordic) for EUR 14.6 million in Q1 2003 and
EUR 13.9 million in Q1 2002, as well as sales for Mobile Planet.
*** On a comparable basis in terms of Group structure, exchange rate and number of days.

Serge Weinberg, Chairman of the Management Board of Pinault-Printemps-Redoute, made the following statement:

"Sales for the first quarter of 2003 confirm the improvement in the Group's sales performance, despite the economic and international climate. The sharp growth in the Retail division and encouraging results in the Luxury Goods division reflect the strength of our concepts and our sales and marketing initiatives. This growth reflects market share gains, while pursuing intense efforts in purchasing and cost control. The growth in Group sales reinforces our strategic focus on a single customer, the individual."

 

Comparable change	Q1 2002	Q2 2002	Q3 2002	Q4 2002	Q1 2003
Group	-1.7%	-1.8%	-0.5%	+1.7%	2.8%
Retail + Luxury *	+0.7%	+0.1%	+1.9%	+3.2%	+6.2%

* including CFAO

In the first quarter of 2003, the difference between actual and comparable sales reflected the negative impact of changes in Group structure, which totalled EUR 279.4 million, relating to the sales of Finaref and Finaref Nordic, Facet and Guilbert's mail-order business, and the negative impact of exchange rate fluctuations, mainly associated with the US dollar, amounting to EUR 302.9 million.

The Group's Internet sales stood at EUR 232.9 million in the first quarter of 2003, up 31.4%.

 

Pursuing Retail's dynamic performance

The Retail division's stepped-up growth in 2002 continued in the first quarter of 2003, with spectacular growth of 6.1%, as compared to 3.5% in the fourth quarter of 2002. This rise reflects the dynamic performance of Group companies in France and abroad, mainly bolstered by the implementation of the "CliO" (Client Obsession) programme which aims to gain profitable market share through a series of sales initiatives. On a like-for-like basis, sales of the Retail division rose by 4.1% in the first quarter of 2003.

Comparable change

Q1 2002 -1.1%

Q2 2002 +0.5%

Q3 2002 +1.3%

Q4 2002 +3.5%

Q1 2003 +6.1%

> Leisure and Household Goods Division

» Conforama

Conforama recorded 5.9% growth on a comparable basis in the first quarter of 2003, of which 4.2% on a like-for-like basis.

In France, activity grew by 4% on a like-for-like basis, boosted by the successful sales season and a more competitive promotional campaign.

Internationally, Conforama recorded growth of 10.6% on a comparable structure and exchange rate basis, notably with a rise of 7.6% in Italy (on a comparable store basis), 14.8% in Spain (in actual terms), 4.5% in Switzerland and 4.3% in Poland on a comparable store basis.

» Fnac

On a comparable basis, Fnac recorded sustained sales growth, up 7.5% in the first three months of 2003 (2.2% on a like-for-like basis) and posted healthy results in France as well as buoyant sales growth in international markets.

In France, the 65 Fnac stores (including the Chartres store opened in the first quarter of 2003) recorded a 3.3% rise in the first quarter, mainly boosted by store sales in the French regions (up 4.2%) and in Paris (up 3.7%).

The specialised subsidiaries in France continued their successful performance, posting 20.2% growth in the first quarter, of which 23.2% for Surcouf, which opened a fourth store, in Bordeaux, in March, and 13.7% for the Children's division with a strong start to 2002 for Eveil & Jeux, up 19.2%. This reflects Surcouf's successful expansion strategy as well as finely-tuned customer segmentation.

Sales outside of France grew by 13.3% on a comparable structure and exchange rate basis. In actual terms, Fnac store sales rose by 13.7%, with sharp growth in Portugal (+14.5%), Spain, (+13%) and especially in countries in which the company recently established operations (+72.7% in Italy, +60.4% in Switzerland on a comparable exchange rate basis and +32.4% in Brazil on a comparable exchange rate basis). The next store opening is planned for the second quarter in Naples, thereby increasing the number of Fnac stores outside France to 33.

Internet sales grew by a factor of 1.5 in the first quarter and now account for 2.6% of total sales, of which 20.3% for Eveil & Jeux and 9.7% for Surcouf.

> Apparel and Lifestyle Division

» Printemps

In the first quarter of 2003, Printemps recorded sales growth of 1.9% on a comparable basis. The first quarter of 2003 was marked by the dynamic growth of the Sports division and the strength of the department stores despite the drop in store visitors due to the conflict in Iraq.

The department stores maintained strong overall activity, up 0.4%, with sustained growth for the chain stores (excluding Haussmann store), which recorded a 4.9% rise in activity, benefiting from the promotional campaigns of the Printemps store card and a solid performance in Women's Fashion, up 13.7%. Activity at the Haussmann store, down by 4.5%, suffered from the drop in the number of international visitors due to the conflict in Iraq and the major renovation work in the Fragrances/Cosmetics department, which aims to create one of the largest selling areas worldwide (3,000 sq. m.).

The Sports division, which combines Citadium and 18 Made in Sport stores (including a new store opened in March 2003), grew by 9.4% in the first quarter. In March alone, sales of the Sports division grew by 22.1%.

» Redcats

In the first quarter of 2003, Redcats pursued the recovery begun in late 2002 (up 0.9% on a comparable basis in Q4 2002), with a 6% rise on a comparable basis. Excluding the US, growth was even stronger on a comparable basis, at 8%.

In actual terms, the company recorded a drop of 1.3%, suffering from the very negative impact of exchange rate fluctuations (down 7.0%) due to the drop in the US dollar and the British pound against the Euro.

In France, the success of La Redoute's spring-summer catalogue reinforced the brand's leadership, with sales up by 12.1%, outperforming the market by 4.4 points in the first quarter of 2003. The La Redoute catalogue was also successful outside France with spectacular growth of 15.4%, of which 16.8% in Switzerland, 11.4% in the United Kingdom and 11.5% in Belgium. These healthy results reflect the success of the catalogue's renewed focus on its core target customer, women, and the Internet channel's positive impact on mail-order sales.

In the US, Brylane grew by 1.7% in the first quarter of 2003, with particularly strong performance in March and 24.1% growth in the household goods business, due to the success of the Brylane Kitchen catalogue launched in February 2002.

Redcats Nordic started the year well, with a 15.4% increase in mail order sales in the first quarter of 2003.

In the first quarter of 2003, the specialised companies Vertbaudet France and Somewhere confirmed the strong sales performances seen throughout 2002, with growth of 11.9% and 12% respectively.

Internet sales now account for 12.3% of total company sales, compared with 9.5% in 2002, of which 22.3% for Brylane and 11.2% for La Redoute France.

» Orcanta

On a comparable store basis, Orcanta recorded sales growth of 8.2% in the first quarter of 2003.

 

 

Healthy performance of the Luxury Goods division

Comparable change

Q1 2002 +4.4%

Q2 2002 -6.6%

Q3 2002 +1.5%

Q4 2002 +3.8%

Q1 2003 +6.0%

Sales of the Luxury Goods division comprise the Gucci Group's activity between November 2002 and January 2003. Sales for the period remained stable (up 0.3%) in actual terms, mainly affected by the drop in the US dollar and the Japanese yen, and grew by 6% on a comparable basis.

Gucci's sales dropped by 8.3%, mainly due to exchange rate fluctuations. Retail sales fell in Japan, Europe and the US. In Asia outside of Japan, retail sales rose sharply, mainly bolstered by excellent growth in Taiwan, Korea, Hong Kong and China.

Yves Saint Laurent continues to record excellent sales growth (up 32.8% in actual terms), mainly reflecting impressive results in leather goods and footwear (up over 400% and 65% respectively on a comparable exchange rate basis). At January 31, 2003, Yves Saint Laurent had 48 directly operated stores, including the recently opened 930 sq. m. store in Milan (via Montenapoleone). In 2003, Yves Saint Laurent plans to open major flagship stores in New York, Beverly Hills, Hong Kong and London.

YSL Beauté also recorded strong performance, with actual sales up by 10.3%, reflecting healthy sales of its leading fragrances, Opium and Kouros, exceptional growth in its cosmetics range (up 24.5%) and the successful launch of the new men's fragrance, M7. YSL Beauté launched Alexander McQueen's first fragrance, Kingdom, in the first quarter.

Bottega Veneta's leather goods were extremely successful, with sales growth of over 90% on a comparable exchange rate basis.

 

Excellent performance of CFAO

Comparable change

Q1 2002 +7.4%

Q2 2002 +9.0%

Q3 2002 +7.0%

Q4 2002 +0.0%

Q1 2003 +7.9%

Despite events in Ivory Coast, CFAO recorded very strong sales growth in the first quarter of 2003, with a 7.9% rise on a comparable basis. This growth mainly reflects the development of CFAO Technologies (up 32.2%), which now has operations in eight countries (Cameroon, Senegal, Ivory Coast, Gabon, Nigeria, Mali, Burkina Faso and Algeria), solid growth in the Pharmaceuticals sector (up 11.9%), with the growing development of the activity in Egypt, and the mixed results of its Automobile business, with strong growth in the French overseas departments and territories (11.9%), eastern and southern Africa (up 32.3%) and to a lesser extent in central Africa (down 5.4%) and western Africa (down 0.3%).

Following the acquisition of Isuzu Morocco, which will be consolidated in the second quarter of 2003, CFAO is strengthening its automobile distribution business in Morocco.

 

 

Business-to-Business held up well

Comparable change

Q1 2002 -5.2%

Q2 2002 -4.6%

Q3 2002 -4.0%

Q4 2002 -1.0%

Q1 2003 -2.8%

 

» Rexel

On a comparable basis, Rexel's activity fell by 3% in the first quarter of 2003. Sales were down 3.6% in North America, down 4.5% in Europe excluding France and down 1.4% in France. After accounting for the impact of exchange rate fluctuations of EUR 149 million, mainly due to the appreciation of the euro against the US and Canadian dollar, the decline in activity stood at 10.2%.

The implementation of previously announced reorganization measures is ahead of schedule. These measures have been intensified to respond to an environment which remains difficult. In such an environment, operating profitability is not expected to improve in the first half of 2003. However, cost reduction initiatives should allow Rexel to increase operating income in the second half of 2003, even if the current economic conditions continue.

HELVETICA>

» Pinault Bois & Matériaux

On a comparable basis, the company recorded a slight fall of 2.5%, with a small drop in activity for the Distribution business and a decline in the wood Importing and Processing business.

The actual decline of 0.1% includes the positive impact of changes in Group structure of 2.4%, particularly due to the carryover impact of acquisitions made in 2002, 2003 acquisitions and the sale of the company's Moroccan business to CFAO.

» Guilbert

On a comparable basis, Guilbert's sales fell by 2.2%, mainly reflecting strong performance in France (up 1.3%), dynamic growth in Spain and Portugal (3.1% and 24.5% respectively) and poorer performances in other countries where the company is active.

In actual terms, sales fell by 27.8%, primarily reflecting the sale of Guilbert's mail-order business. On April 8, 2003, the Pinault-Printemps-Redoute Group announced the sale of Guilbert to the US group Office Depot. This transaction is subject to approval from the relevant EU authorities.

 

 

in EUR million	31/03/03 Actual	31/03/02 Actual	Change Actual	Change Comparable basis ***
Conforama	685.3	646.5	+6.0%	+5.9%
Fnac	833.7	781.6	+6.7%	+7.5%
Mobile Planet	5.0	6.5	-23.1%	-5.7%
Lesiure and Household Goods division	1,524.0	1,434.6	6.2%	+6.7%
Printemps	222.3	215.9	3.0%	+1.9%
Redcats	1,084.3	1,098.1	-1.3%	+6.0%
Orcanta	12.2	10.8	13.0%	+12.6%
Apparel and Lifestyle division	1,318.8	1,324.8	-0.5%	+5.4%
Retail **	2,842.8	2,759.4	3.0%	+6.1%
Luxury Goods	714.8	712.4	0.3%	+6.0%
CFAO	411.3	387.1	6.3%	+7.9%
Subtotal Retail + Luxury *	3,968.9	3,858.9	2.9%	+6.2%
Rexel	1,660.8	1,849.2	-10.2%	-3.0%
Pinault Bois & Matériaux	329.7	330.1	-0.1%	-2.5%
Guilbert	353.6	490.0	-27.8%	-2.2%
Business-to-Business	2,344.1	2,669.3	-12.2%	-2.8%
Credit and Financial Services **	-	187.6	na	na
(Inter-company sales)	(8.6)	(10.2)	na	na
Total	6,304.4	6,705.6	-6.0%	+2.8%

* including CFAO.
** The Retail division now includes the remaining stake in the Credit and Financial Services businesses (Redcats Finance UK and Ellos Nordic) for EUR 14.6 million in Q1 2003 and
EUR 13.9 millions in Q1 2002, as well as sales for Mobile Planet.
*** On a comparable basis in terms of Group structure, exchange rate and number of days.

 

Contacts
Press:
Juliette Psaume +33 (0)1 44 90 63 02
Analysts/Investors:
David Newhouse +33 (0)1 44 90 63 23
Alexandre de Brettes +33 (0)1 44 90 61 49

Press website: www.pprlive.com
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