New York, Sept 10 - The U.S. arm of spirits group Pernod Ricard SA is cautiously optimistic about the new fiscal year and is concentrating its marketing on core brands as consumers begin to spend a little bit more.
Meanwhile, its French parent company is hoping to raise 300 million euros by selling brands following last year's big acquisition of Absolut vodka, but it will not be pressured to sell too cheaply, a senior executive said.
"We are confident that we can go on selling remaining assets at the right price," said Gilles Bogaert, Pernod's managing director of finance. "What is key is that we'd prefer not to sell assets than sell at too low a price."
Bogaert said the company, which vowed to raise 1 billion euros through asset sales to help pay down its debt, is not under pressure in the very short term, although it aims to complete the sales in a "reasonable period of time."
Pernod is already 70 percent through the plan, having reached deals to sell its Cruzan, Wild Turkey and Tia Maria brands.
Last week, Pernod posted a 21 percent rise in recurring operating profit for the year to June 30. But Chief Executive Pierre Pringuet forecast the current fiscal year would remain difficult as the overall wine and spirits industry stagnates.
Pernod Ricard USA Chief Executive Paul Duffy told Reuters on Thursday that the U.S. business is still under pressure as consumers are nervous and jobless rates are high.
But Pernod, maker of Martell cognac and Jameson whiskey, is seeing "considered spending" by consumers, Duffy said. That means they are willing to open their wallets, but are taking more time to consider what they buy.
Duffy said he was encouraged that some macroeconomic trends have been improving, but said it was hard to know when that improvement would translate into consumer behavior. And with the important winter holiday season fast approaching, Duffy declined to make forecasts.
"I have no idea what's going to happen" during the holidays, he said, but added the company is gearing up with new marketing and advertising campaigns.
He said Pernod USA is focusing 80 percent of its advertising budget on the top 6 brands: Absolut, Jameson, Chivas Regal and Glenlivet Scotch whiskeys, Malibu rum and Kahlua liqueur.
Pernod's champagne brands, such as Perrier-Jouet, have been among the hardest hit since people often drink champagne when they are celebrating and people have not been celebrating much with the economy in the deepest recession since the Great Depression.
But Duffy said a rebound in champagne sales will be a sign of some optimism bubbling through the economy.
"Champagne is a leading indicator," he added.