The president of luxury goods company PPR, Francois-Henri Pinault stated he is not refocusing the business with the recent divestment of Printemps, the department store, for €1.075 billion (£720 million) and Orcanta, a lingerie chain, for €42.5 million, in the first half of the year. M Pinault says that the group's two-legged structure focusing on retail and luxury goods gives it security. Retail is high volume, mass market but perhaps slower growing, while its luxury goods side can be volatile but has a wide geographical spread and high growth potential.

M Pinault was in London last week to take in London Fashion Week and catch up with Gucci, PPR's luxury goods label, which has its head office off Bond Street. One can't help wondering whether he has his eye on snapping up a bargain company while here. Gossips suggest that he is interested in Bulgari, the Italian luxury goods firm.

M Pinault will not reveal who has taken his interest, but told The Times: “Buying a big brand with a high valuation implies a certain level of growth rate in the future to justify the price. It is quite risky buying those companies. It could be more interesting in creation of value to look at medium-size brands with a few hundred million euro turnover and take that risk and say this brand has the potential to grow.�

The acquisition of Bottega Veneta, which had sales of less than €50 million and some financial difficulties, has certainly worked for Gucci Group. Sales reached €160 million last year and were up 79 per cent in the first half of this year. M Pinault now believes the brand has potential to be a €500-million turnover business.

He says the plan for Gucci Group is to seek acquisitions which will not overlap in terms of market position or speciality. In terms of PPR's existing luxury brands, Gucci is still the backbone of the group that bears its name, with profits of €297.4 million in the six months to June 30, up 34.1 per cent on the previous year.

The group also encompasses the watchmaker Bedat & Co and the footwear brand Sergio Rossi as well as Yves Saint Laurent and the young start-up brands Stella McCartney and Alexander McQueen, which are all loss-making. M Pinault says that he expects the two British brands at least to break even next year.“I am very pleased with how they are going and find their position in the market very specific and consistent,� he says.