Francois-Henri Pinault
43, CEO, PPR
By Sarah Raper Larenaudie
Fall 2005 Style & Design
In 1999 the French retailing giant PPR (formerly
Pinault-Printemps-Redoute) jumped into the luxury-goods sector with the
surprise acquisition of Gucci and Yves Saint Laurent. Since then, the
company's founders, the Pinault family, have delivered one plot twist
after another.
They stunned the fashion world in 2003 when they decided not to renew
the contracts of Gucci's artistic director Tom Ford and chief executive
Domenico de Sole, the pair who gained guru status for their spectacular
turnaround of the limping design house in the mid-'90s. Then, earlier
this year, François-Henri Pinault, newly installed as chief of Artémis,
the family's holding company, caught industry experts off guard again.
Although his father François Pinault had delegated the day-to-day
running of his companies to a nonfamily chief executive, François-Henri
announced he would be assuming the role of PPR's CEO, overseeing
operations at the world's third largest luxury conglomerate.
PPR's stock price dipped on the news (though it recovered in the weeks
that followed) as analysts questioned whether François-Henri was up to
the job of running a $22 billion publicly traded company whose
holdings—in addition to the brands within the Gucci Group—span the
consumer retail sector, including the French department store Printemps,
catalog giant La Redoute and the music-and-book chain FNAC. (Via
Artémis, the Pinaults also own Christie's auction house, the Château
Latour vineyard, leading French newsweekly Le Point, local newspapers, a
soccer club and a Paris theater.) The move did, however, silence those
who said François-Henri was merely his father's puppet.
Pinault père, who never finished high school and launched his empire
from a sawmill in Brittany, France, in 1963, is famous for having
grabbed opportunities when they came along, even when it meant
completely redefining his business. Equipment leasing, office supplies,
consumer credit—all were sectors Pinault bought into and later sold.
François-Henri spent his childhood in Rennes in Brittany and says he
never felt any pressure to join the family company. After business
school, he worked in various branches of the group, becoming president
of FNAC in 1997. In an unusual arrangement, beginning in 1987, François
Pinault organized a group of French business leaders to meet regularly
with his eldest son to determine whether François-Henri was capable of
succeeding him. Their conclusion was affirmative. "When my father turned
over the holding company to me, he was 67 and in good health," notes
François-Henri. "Ninety percent of company founders in his situation do
not let go. He turned it over to me completely."
The younger Pinault comes across as friendly and polite, assured but not
cocky as he talks about his plans in an interview in his office near the
Arc de Triomphe. He even blushes slightly when asked about reports in
the tabloids that say he has been squiring actress Nicole Kidman, whom
he describes as merely a "good friend."
In less than three years, PPR has built a full-fledged luxury group with
a mix of brands. In addition to the establishment Gucci and Yves Saint
Laurent, the group acquired smaller brands including Bottega Veneta
leather goods and accessories, Sergio Rossi shoes, Balenciaga fashion,
Boucheron jewelry, various cosmetics and watch brands and two fashion
start-ups: Alexander McQueen and Stella McCartney.
That's too many brands, too fast, say many industry experts, and they
have urged PPR to sell off some of the smaller ones. In meetings with
investors and journalists, François-Henri has been clear that the buying
spree is over and that his job will be to consolidate the recent
acquisitions and grow the existing businesses. Gucci had annual sales of
$2.4 billion in 2004, and François-Henri and Gucci Group boss Robert
Polet say they can double that figure over the next seven years, largely
by expanding into emerging markets, without losing any of Gucci's
luster. "The best guarantee to ensure the brand Gucci never goes mass is
to have this multibrand strategy. It's the only way to develop a
luxury-goods group over 10, 15 or 20 years," says Pinault. But he says
even the smallest brands must perform, and PPR has set 2007 as its
break-even deadline.
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