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Close-Up Preview: Q&A with Alexis Babeau, managing director of PPR’s luxury division

Drapers gives you an exclusive sneak peak of our Close-Up interview with Alexis Babeau, managing director of French powerhouse PPR’s luxury division, ahead of the full interview in this weekend’s edition.

Did you always want to work in fashion?

No, I started as an auditor in finance and I ended up in fashion because I joined PPR back in 2001 when it had a bank [Finaref]. The bank was sold by PPR when it purchased the last big stake in the Gucci Group, and I then started as CFO at Gucci Group, at the beginning of 2004.

I have been enjoying working in fashion and luxury a lot. It’s a wonderful industry and not only because it’s growing quickly and a profitable industry, but because it’s one of those rare businesses where you not only have to manage science but where you have to manage art. And this is quite unique.

PPR’s luxury division’s revenues were up 12% for the third quarter of 2012. Where is the growth coming from?

Our most important brand is Gucci. It’s a brand which has duality, because you find at the same time the Tuscan and leather goods heritage, as well as modernity. This duality is very unique.

However, at same time we have been able to nurture other powerful brands. Let’s take Bottega Veneta for example, which is today our second largest brand. When we purchased Bottega Veneta back in 2001 it was a very tiny brand, [turning over] a few million Euros. Last year it [turned over] €700m (£603m). So we have been growing that brand in a tremendous way. And if you take Alexander McQueen, then I think that since the acquisition of that brand in 2001 we have grown its sales by eleven times.

How do you manage your brand portfolio? How do they benefit from the ‘PPR effect’?

Our duty as brand manager is to make sure that our brands are reaching their full potential, but always making sure that we keep their identities and individual DNA in-tact. For example, it would be very simple to say I’m going to mass buy all the skins for all my brands, because as you can imagine we would save a lot of money. However, we would never ever do that because in Bottega Veneta we use mainly sheep skin - neppa - which is a very rare skin. While Gucci it is very much about calf. And we certainly don’t want the handbags of Gucci and Bottega Veneta to look alike. The same would go for the crocodile skins we use for both brands. Gucci uses crocodiles mainly from Asia and the US, while Bottega Veneta is using crocodile from Africa. The scales are different. Each brand has its unique DNA, its unique positioning, and this is what makes it successful.

Conversely what do we share within PPR are hard synergies such as real estate and supply chain [capabilities] and also certain soft synergies. With 13 brands we have a unique pool of talent, and we can share those talents. For example, four years ago Patrizio di Marco took the reins at Gucci as CEO, and he used to be the CEO of Bottega Veneta. We knew him. And who did we put at Bottega Veneta? Marco Bizzarri, who used to be the big boss at Stella McCartney. Another soft synergy we have is the ability to share information. Because with 12 brands, including sizeable businesses such as Gucci, Bottega Venetta, Yves Saint Laurent and Balenciaga, we have a lot of information about the behaviours of the customers. This includes information from the right cities to open stores in to trend information.

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