Bringing culture to the French masses has, it seems, proved too much of a challenge for the billionaire behind some of the world’s biggest luxury — and by definition most exclusive — brands. François-Henri Pinault is set to announce today that he intends to divest himself of Fnac, a chain created half a century ago by the idealistic Trotskyist activist André Essel, who practised libertarian management and encouraged staff to rebel against their superiors.
His aim was to cultivate the working classes by cutting the price of literature and music, but time has caught up with the business. Its core core activities in books, CDs and DVDs, computers and electricals is under pressure from the internet and it is often portrayed as a millstone around Mr Pinault’s neck.
The tycoon, whose PPR conglomerate also owns Gucci and Yves Saint Laurent, wants to underline the group’s upmarket credentials by concentrating on his luxury division and on sports brands such as Puma and Volcom. However, he appears unable to find a buyer for Fnac, which has 80 stores in France and 68 overseas. CM-CIC Securities valued the chain at €775 million (about £625 million) but others said €550 million was more realistic. PPR’s board is set to back the split, with sources saying it was likely to take the form of a stock market listing. Fnac recorded sales of €41.6 billion last year, 34 per cent of PPR’s total revenue.
Mr Pinault, who has a son with Linda Evangelista and a daughter with Salma Hayek, also wants to hive off Redcats, his mail order division. PPR is expected to announce this month that it is selling OneStopPlus and Golf Warehouse, Redcats’ American businesses, to an investment fund.