Financial Information and Brand Value

3Value Review and the Acquisition of the GUCCI Brand

We have chosen to use Pinault-Printemps-Redoute’s (PPR) acquisition of Gucci as a case study to illustrate an empirical analysis of brand valuation. This large-scale transaction was motivated by the group’s focusing strategy. Before the launch of this acquisition, the PPR Group had conducted a strategic study, questioning the group’s competitive position regarding its main competitors. The purpose of this acquisition was to ensure the long-term sustainability of the PPR Group through a new industry, linked to the development of luxury brands. In concrete terms, the acquisition of Gucci was both an opportunity and a desire of the PPR Group to refocus its activities around a prestigious brand. As a result, we studied the annual financial reports of the PPR Group during the phases of the acquisition of Gucci, which took place in 1999, 2001 and 2004. This enabled us to understand the terms and conditions of the acquisition, to analyze the financial information communicated by the PPR Group in relation to this operation and to present our findings and observations.

We first specify the methods for identifying and accounting for the brands in PPR’s financial statements, then we analyze the methods used for brand valuation and the methods for disseminating accounting information in the group’s financial documents. Finally, we review the presentation methods of the financial information and evaluate the relevance of this financial ...