PPR exec remains upbeat on luxury growth

PPR chief executive François-Henri Pinault commented after

the purchase of Qeelin that his company is to “reinforce” PPR’s portfolio of luxury brands and to expand further its share of the market – particularly in China.

The Group, which also operates Gucci, Bottega Veneta and Stella McCartney, does not see the 'slowdown' in China as a reason for concern. Pinault told the FT: “If the US grew at 5 per cent a year we would be celebrating. There would be no more fiscal cliff. But China slows to 7 per cent and it is a disaster? No. I have no worries at all about its potential for development over the long term.”

“My very deep conviction is luxury is enormously profitable if managed properly. In the last 10 years it has exploded from three regions – the United States, Europe and Japan – with 800m consumers. With China, India, Indonesia, Brazil and Mexico there are 3bn potential new consumers in the next 50 years.”

In contrast to Pinaults upbeat outlook, a recent report from Bain & Co and Italian luxury consortium Altagamma said the luxury market would grow by just 5 per cent at constant exchange rates in 2012, compared with 13 per cent in 2011. McKinsey estimates the Chinese luxury market will grow at 12 to 16 per cent over the next three years, compared with about 20 per cent in the past four years.