Editor’s note: Joe Einhorn, chief executive of fashion pinning/buying site The Fancy, interviews François-Henri Pinault, Chairman and CEO of PPR, in the article below. PPR the Paris-based group that owns luxury brands such as Gucci, Yves Saint Laurent and Alexander McQueen, and sports brands that include PUMA and Volcom (and is an investor in The Fancy).
Joe Einhorn: We were talking recently and you told me that you used to be a computer programmer and that you even started your own company a long time ago. What’s the story?
François-Henri Pinault: It’s true that I’m fond of new technologies and it dates back quite a long time ago. I discovered computer science back in 1980, when I was a student at HEC business school in Paris. I found it so interesting that I used to spend a lot of time reading and learning more about computing. I learnt FORTRAN and COBOL programming languages. As a member of the school’s student-led junior company, I started focusing on relational databases management for our clients and I became the Dbase software developer of the team.
I was so interested in this area of computer science that I successfully applied for an internship at Hewlett-Packard in Paris, as a database software developer. I found this period very rewarding, because I had the feeling of being a pioneer. I even took part in the creation of a start-up company with some fellow students. It was about using artificial intelligence (at that time neuronal networks were used) to develop business software focused on databases, CRM and relationship marketing. The company exists to this day. It’s called Soft Computing and continues to be managed by my former schoolmate Gilles Venturi. And I’m still a member of the Board.
A couple of years later, I had the chance to discover Silicon Valley. After graduating from HEC, I used the chance we had in France at that time to do my military service as a civilian volunteer. As such, I worked for the French Trade Commission in Los Angeles in 1985-1986. My job was to monitor and write reports about the business environment in California for French companies that wanted to settle or invest there. I was in charge of new technologies and fashion (there is no such thing as chance!). I used to go to the CES in Las Vegas, which I still remember as a fascinating experience. I even used to earn pocket-money by translating computing documents from English to French! So yes, at that time I guess you could call me a geek!
Many years later, I became CEO of the French electronics retailer Fnac, which is still part of PPR. I used to bring back new computers and electronic devices from Japan to ensure that my team was aware of the very latest trends. I loved to test products by myself! It was also a key period for me because we launched the e-commerce website fnac.com at that time in 1997. It is now in the top 3 biggest online shopping sites in France.
Einhorn: Do you remember your first computer?
Pinault: The first PC that I actually bought myself was a Toshiba Papman in 1985. This model was one of the very first laptops, I remember that it was a revolution at the time! I also remember well my first e-mail account, it was on Compuserve in 1995. I started buying on the Internet quite rapidly, as early as 1995.
Einhorn: What area of computer science research & development interests you the most?
Pinault: I closely follow everything about ‘user interface’ or ‘human-computer’ interface: technology that makes computers closer to the way the human being actually functions. I’m interested in the progress of speech recognition technologies. I think that computer science still has a lot to do to get closer to the five senses of the human being. Besides, I’m also curious about the next generation of intelligent recommendation engines.
Einhorn: What trends are you seeing and where are your companies going with web, mobile and in-store technologies?
Pinault: E-business is of course a strategic priority for PPR. We are currently speeding up our brands’ e-business projects and we have identified a pool of key skills with which to share best practice, and to increase digital use in an integrated program across all Group activities. This covers marketing and communications, merchandising, distribution and sales. This internal “Digital Academy” aims at instilling a group-wide digital culture by raising awareness on how the digital revolution is impacting our business. We also want to develop our digital resources by strengthening and challenging their expertise and broadening their horizons.
There is an interesting move in the luxury sector right now. While the whole industry has been resisting e-commerce for the last 15 years, it’s now realizing that e-commerce is inescapable and represents a growth opportunity. I want the PPR Group to lead the way because I’m convinced of the long-term benefits. Things are moving fast now, and 2012 will be a key year for our luxury brands as far as e-commerce is concerned. For instance, we have just announced a joint-venture agreement with YOOX Group, one of the leaders in online luxury. The newly created company will be entirely dedicated to managing mono brand online stores in collaboration with several of PPR luxury brands. This initiative will allow PPR to generate synergies and shared resources available to our brands through best-in-class e-commerce expertise. And with this partnership, we invest in key skills essential to grow our business in the future.
As for Fnac (our electronics, books and video retailer that is present in France, Spain, Portugal, Brazil, Belgium and Switzerland), we are now working to give the customer an “omni-channel” experience. The customer must be able to buy online in a store when the product is too specific or out of stock, or to buy online from home and pick-up the product immediately at the closest store. The transition between online and offline must be absolutely seamless. We are currently making huge progresses on this in our new stores.
Einhorn: As the CEO of a $15bn dollar public company what insights can you share for the entrepreneurs out there dreaming of a big IPO?
Pinault: I don’t think being listed should be a goal in itself for an entrepreneur, unless you want to take your money and retire. If your goal is to build a leading and sustainable business, being listed can be an important step, but it’s not the end of the story. And you should remember that being listed is also a time-consuming constraint for CEOs. It’s just a means to find new resources to continue developing the business and implementing a long-term strategy.
Long-term strategy, having a vision is the key. The Horizon of the stock market is often too short for a long-term vision. Stable and long-term shareholders are the most important for a young company, even for a mature one. In the case of PPR, the family control plays that role. When I became the CEO of PPR in 2005, I already had a strategy in mind and I started implementing that strategy for the long term, step by step. My plan is to transform PPR into a global player in the apparel and accessories sectors, in the two fastest growing market segments: luxury and sport & lifestyle. We started to dispose of retail assets as soon as 2006, and building the sports & lifestyle division around PUMA as soon as 2007. Since then, we have been moving forward with no rush, but with the objective clearly in mind. At the same time, we are getting closer to our brands, providing direct support and achieving greater integration. The idea is that the combined power of our teams will enable our brands to outperform their markets.
Einhorn: What are your favorite web sites right now and why?
Pinault: I like to follow the IT industry news on beta.techcrunch.com. I am always looking at the best sites in Luxury and Sports to benchmark my brands sites. As a soccer fan, I also like Francefootball.com… I am used to buying online quite often, especially for music and video. Of course I go on fnac.com, which is the leading competitor to Amazon in France. I buy books that I read on my Kobo ebook. I also buy online for my children, games and toys for instance. Of course I love TheFancy.com. I recently found a wristlet that can measure how good your sleep is. I bought it.
Einhorn: What are your favorite iPhone and iPad apps right now and why?
Pinault: I like to discover new things and I’m always testing new apps. I particularly like Gucci Style, the new Gucci app for iPhone and iPad, which is a digital shopping magazine that offers editorial content, fashion stories and live feeds from Gucci’s social networks. You can purchase Gucci products directly from the iPad and it’s in 8 different languages. It’s quite innovative and has been downloaded over 1 million times.
Einhorn: What are your favorite gadgets?
Pinault: Recently I bought an interesting digital watch from I’m Watch. I love gadgets in general and the best place for new ideas is for sure TheFancy.com!