French book and music chain Fnac has been rewarded by investors for its new strategies, as the share price pushed ahead of its introductory price (22 euro) of last June.
Severed because of other focus
Group Kering, formerly known as PPR, put Fnac on the stock exchange as it wanted to focus on luxury. The fact that Fnac had largely missed the digital revolution, taking a huge hit on book and music sales, did not help its cause and led to severe problems.
To move Fnac out of the group, it was given a separate stock exchange listing in June. In order to pull in additional sales, the focus was expanded, adding toys and small household appliances. For this move, the chain was rewarded: its share closed at 23.7 euro yesterday, after dangling around 20 euro for a long time.
Negative trend has not been reversed yet
Nevertheless, Fnac is still in a slump that has not been reversed yet: its third quarter turnover dropped 5.9 % to 844 million euro. The drop in its home market, France, was slightly lower, at 4.7 %. The competition dropped even more though, meaning Fnac managed to capture market share.
The chain is currently working on expanding the franchise section of its store network. By the end of September, it had 19 franchise stores, on a total of 174 stores.
(Translated by Gary Peeters)