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News > France's PPR Purchases Volcom for $608M

France's PPR Purchases Volcom for $608M

VolcomThe multinational holding company, PPR, recently announced an agreement with Volcom to purchase the action sports brand for $608 million – adding to its portfolio of highly visible global properties.

Volcom joins Puma, PPR’s other major athletic brand, along with high-end entities such as Yves St. Laurent and Gucci, also owned by the conglomerate.

Chairman and Chief executive officer of PPR François-Henri Pinault said, "Volcom is arguably one of the most desirable global action sports brands with an authentic legacy rooted in surf, skate, and snow sports."

The agreement should be finalized by September 2011, but Volcom enthusiasts can rest assured that the brand will remain in tact. Volcom founder Richard Woolcott and Volcom's other directors will remain with the company.

Woolcott highlighted just how advantageous this move can be for Volcom, "PPR, with its expertise gained through both Puma and its Luxury Group, could bring international market knowledge, sourcing capabilities and other operational expertise in areas such as product development and retailing to help the company grow Volcom globally, while preserving the elements that make the brands authentic."

PPR is banking on the Volcom brand flourishing in a more global market, perfect timing for a company that struggled in the economic downturn, earning just $22.3 million in net income last year. PPR’s Puma and Cobra Golf units also struggled, thus acquiring Volcom is seen as a way of fortifying PPR’s overall athletic offering.

Specifically, PPR was interested in adding Volcom’s specialties such as board shorts, hoodies and lifestyle clothing to Puma’s focus on soccer and running shoes.

Pinault believes the two brands fit perfectly together, “We admire Volcom's brand management capabilities and the unique voice in which it speaks to its customers, expressed in high-quality, fashion-forward, innovative apparel and accessories.  Volcom is complementary to Puma and we are convinced that its integration into our Sport & Lifestyle Group will speed up its development."

Still, the true success of this deal will take time to measure. If already high consumer retail prices continue to rise, or the brand is altered, there may be a major impact on Volcom’s overall sales. And, will foreign markets accept Volcom the same way it has adopted Puma?

-Ryan O'Leary

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