Le Conglomerateur Formidable

By Carson-Parker, John | Chief Executive (U.S.), March 2000 | Go to article overview

Le Conglomerateur Formidable


Carson-Parker, John, Chief Executive (U.S.)


Macy's buys Tiffany. At first sight, the purchase of a controlling stake in Italy's Gucci by France's Pinault-Printemps-Redoute certainly looks this way, because Gucci is one of the world's leading purveyors of high-priced luxury goods, and "PPR" is very much a middle-market retailer group.

But, with its seriously diversified interests, PPR is clearly more than just a retail company. Its business-to-business operations distribute electrical equipment, building materials, and office products, and the firm also operates France's leading consumer credit group. Most recently, PPR has acquired 42 percent of Italian luxury goods company Gucci Group.

And, to understate it, the man behind PPR, Francois Pinault, is much much more than the majority owner of a retail store chain. His personal fortune has been estimated by Forbes at more than $6 billion, his private holding company not only controls the giant retailing conglomerate, but also has an intellectual power base through a major interest in France's #1 TV chain and its biggest book chain, owns such priceless gems as Christie's and Chateau Latour, and recently snapped up another bastion of luxury goods in Yves Saint Laurent, which in turn owns or controls Van Cleef & Arpels and Oscar cle la Renta.

Pinault's recent moves into "le luxe" would add several billion dollars more, and they also raise the question of whether he is now planning to challenge Bernard Arnault of LVMH--who owns or controls Dior, Lacroix, Givenchy, Dom Perignon, Chateau Yquem, Hennessy and Louis Vuitton, among many other top names-for leadership of the world's entire luxury goods business.

The newsmagazine Le Point--which, coincidentally or not, is also Pinault-- owned-thinks so. When Pinault launched his bid for Gucci, Le Point called it a "declaration of war" between the two billionaires. But in the judgment of a banker closely involved in Pinault maneuvers, who asked to remain anonymous, Pinault is interested in such businesses as Gucci and Saint Laurent simply as a means to augment his empire. And the authors of a recent Pinault biography contend that his sole interest is the acquisition of wealth.

In this, Pinault has been spectacularly successful. A high school dropout, he began his business career as a small Breton businessman with a loan of $20,000, and is now considered the second richest person in France-right behind L'Oreal heiress Liliane Bettencourt. Along the way, a speculation in commodities reportedly netted him some $2 million on an investment of $60,000, and one deal in the '70s typified many that followed: anticipating the effects of the oil embargo, he sold one of his businesses for $6 million in 1973--and bought it back for $1 million in 1974. …

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