France’s No. 2 luxury group PPR is changing its name to “Kering” to herald its exit from mass-market retail brands such as Printemps and La Redoute, though the new moniker left some observers mystified.
The owner of Guccio Gucci SpA and Yves Saint Laurent SA unveiled the identity change, the fifth since the group listed on the Paris stock exchange in 1988, and a new logo featuring a stylized owl at a news conference in Paris on Friday.
“This is the first big change we have done on the name and identity of the group,” chief executive Francois-Henri Pinault told reporters.
The Paris-based group has been shedding its retail operations and has acquired high-end fashion and sports brands such as Brioni and Volcom to bolster its profitable luxury and lifestyle business.
But as so often with corporate rebranding moves, the first reaction was puzzlement.
“A name change makes sense because retail is not part of the group’s strategy any more. But frankly speaking … I would have seen a name closer to the luxury brands of the group or one that would have given the idea of luxury,” said Mario Ortelli, senior analyst at Bernstein Research.
The name, pronounced like the English word “caring,” combines the word “ker,” meaning home in the language spoken in the coastal region of Brittany where the Pinault family originates, and the suffix “ing,” which the company said indicates movement.
And in a nod to one of the world’s hottest luxury goods markets, PPR noted that its Chinese name would be Kering Kai Yun, with the latter two words referring to “an open sky which … demolishes barriers to imagination and dreams.”
“A synonym for good luck, ‘Kai Yun’ also embraces a very positive connotation in China,” the company said in its press kit about the name change.
Jacob Benbunan, chief executive of Saffron Brand Consultants, which lost out on the contract for PPR’s new brand strategy, said that while the new name probably “could be better,” the novelty would soon wear off.
“We human beings get used to things very fast,” he said. “We will also forget that Pinault-Printemps-Redoute was once called PPR and is now called Kering.”
Kering also suggests a link between the group’s roots as a French family-owned firm and its future ambitions as an international operation, Mr. Pinault said.
Others weren’t so sure.
“The first time I heard about this name I thought that the ‘-ring’ part referred to jewellery,” Mr. Ortelli said.
Jewellery is one of the sectors that PPR is looking at to boost its portfolio of high-end brands, which include Balenciaga, Bottega Veneta and Stella McCartney, and sports and lifestyle brands such as Germany’s Puma.
The company is on the brink of snapping up Milanese jeweller Pomellato, sources close to the matter have told Reuters.
A source with direct knowledge said on Friday that talks between Pomellato and PPR were going on and an agreement may come by early April.
“PPR remains in pole position for Pomellato,” the source said.
Asked about the group’s intentions for Pomellato, Mr. Pinault declined to comment on PPR’s acquisition plans.
Mr. Pinault said the owl in the logo, a sign of wisdom meant to represent the “visionary side” of the group, also pays homage to his father, Francois, who founded the company in 1963 as a timber trade firm and turned into an international group. The owl was his favourite animal.
PPR became a retail conglomerate in the 1990s through a series of takeovers that included Le Printemps department stores, mail order catalogue La Redoute, book retailer Fnac and furniture chain Conforama.
The acquisition of a 42-per-cent stake in Gucci Group in 1999 shifted the company, then known as Pinault-Printemps-Redoute, toward luxury and sports goods, prompting the gradual disposal of the retail businesses and a further name change to PPR SA in 2005, the year when Francois-Henri Pinault became CEO.
With the spinoff of Fnac expected in June and the sale of the remaining units of the Redcats mail order business this year, Mr. Pinault’s overhaul is almost complete.
“The rebranding seems more a marketing operation to me, a move to communicate the end of an era,” said Luca Solca, head of Luxury Goods at Exane BNP Paribas.
If approved by shareholders, the new name will be effective from June 18.
PPR plans to kick off a major advertising push in North America, Europe and Asia from the end of March, supplemented by a digital campaign on Facebook and Twitter as well a co-operation deal with French fashion blogger Garance Dore, a first for such a high-profile rebranding move.
Consumers with a penchant for PPR’s luxury brands seemed unconcerned by its rebranding.
Anika, a 27-year-old British student who was shopping for a Balenciaga bag at the Galeries Lafayette department store, said consumers care only about the designer label, not its owner.
“When I’m buying a bag, I’m looking at the brand, I’m not looking at the name of the owner. I didn’t even know that those brands were owned by PPR,” she said.