It appears the luxury houses aren’t infallible to the global credit crunch after all. Gucci this week saw sales slide in the first quarter ending March 31 as a result of tough trading conditions. Gucci’s sales rose 2.4 percent at constant exchange rates but fell 3.3 percent in the quarter to 513 million euros. PPR on Thursday that first quarter sales rose 20 percent to 4.91 billion euros, thanks to the addition of Puma and robust sales at Yves Saint Laurent and Bottega Veneta. Sales grew 4 percent after taking account of currency exchange, reflecting the impact the high value of the euro against the dollar and yen is having on European luxury firms.

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The improvement wasn’t enough to offset the news about the core Gucci label, however, and PPR’s stock dropped 2.4 percent to close at 82.37 euro in trading on the Paris Bourse.

“We are not satisfied [with Gucci’s quarter] and we have been addressing it at all levels,” Jean-François Palus, PPR’s chief financial officer, said bluntly on a conference call with analysts and reporters.

Gucci’s weakness contrasted with strong showings by Europe’s other big luxury players. Compagnie Financière Richemont, whose fiscal year ends March 31, said Wednesday its fourth-quarter sales accelerated, leading to a 9.8 percent annual gain in revenues. LVMH Moët Hennessy Louis Vuitton last week said first-quarter sales grew 12 percent at constant exchange and despite the adverse currency climate it had seen no slowdown in America.

Palus said Gucci experienced supply-chain issues that affected its wholesale business with the already tough department store segment. “We are working to fix these issues,” Palus said.

Of Gucci’s weak performance, PPR said Bottega Veneta’s sales advanced 31.5 percent to 106.2 million euros on a comparable basis, fueled by all regions, including Japan, where the brand’s sales grew 31 percent.

Yves Saint Laurent grew by 20 percent to 63.1 million euros spurred by sales of the Besace, Ymail and Muse handbags. The brand also benefited from royalties, mostly from fragrances linked to the divestment of the YSL Beauté business to L’Oréal.

Excluding royalties, YSL’s first-quarter sales grew about 7 percent, with revenues growing 11 percent in Europe, 9 percent in Asia outside of Japan and 4 percent in North America.

Balenciaga posted “high” double-digit growth, as did Boucheron, Palus said.

Overall sales at PPR’s so-called “other” luxury brands, which include Sergio Rossi, Alexander McQueen and Stella McCartney, grew 20.8 percent to 133.9 million euros.

About PPR, the company develops a portfolio of high-growth global brands. Through its Consumer and Luxury brands, PPR generated sales of EUR 19.8 billion in 2007. The Group is present in 90 countries with approximately 93,000 employees. PPR shares are listed on Euronext Paris.

Image: Gucci SS08