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Kering Spins Off Puma Stake to Shareholders to Focus Solely on Luxury

Kering pushed through with its plans to become a luxury pure player Thursday, winning shareholder approval for the spinoff of the bulk of its shares in German sportswear group Puma.

“Ten years ago, PPR was a retail group that generated 17 percent of its sales in luxury … last year, luxury represented 70 percent of Kering sales,” said Jean-François Palus, group managing director, referring to Kering’s previous name.

“In 2018, luxury will represent 100 percent of our sales,” he concluded.

Speaking before an audience of shareholders that gathered for the annual meeting in an arched corridor of the group’s historic headquarters, Palus summed up the transition:

“In 10 years, we have radically changed the nature of the group, and we are prepared for the challenges of luxury in the future.”

Kering this week defied expectations with a 36.5 percent sales rise over the first quarter, excluding the effect of currency fluctuations, spurred on by star brand Gucci. The Italian fashion label has clocked five quarters in a row of growth exceeding 35 percent.

“You see, we are close to reaching our transformation into a pure luxury player, I would even say one of the most pure luxury players,” said CEO François-Henri Pinault shortly before the vote.

Following the transaction, the bulk of Kering’s Puma stake will be distributed to Kering shareholders, with the Pinault family’s private investment arm, Artémis, holding a 29 percent stake in the sportswear company. Kering will retain a 16 percent stake, and 55 percent will be free float, an amount that Puma CEO Bjørn Gulden this week said was a “healthy mix,” explaining that the larger float has attracted more interest from institutional investors.

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